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Starbucks is Loosing Money..How?

Posted by Donte Morrisette On Saturday, July 05, 2008


Here is something interesting I read on The Economist site. Starbucks is loosing money and closing 500 of it's stores. Looks like the opened too many locations in the same proximity and the economy is not strong enough for high price coffee (the Starbucks MC Escher photo above explains it):


A remarkable 70% of the stores due to close were opened after 2005, which seems to confirm the comment made by Howard Schultz, when he returned to the helm of the company in January, that most of Starbucks’ wounds were self-inflicted. As it expanded at a breakneck pace, the company opened too many Starbucks in subprime locations. But the deteriorating American economy is doing further damage. As a premium-priced supplier, Starbucks is suffering from the same trading down that is sending shoppers rushing from Target to Wal-Mart. McDonald’s, it seems, has perfectly timed its decision to start selling coffee that is pleasant to drink.

Read the whole article at The Economist

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    Im am currently working with my partner in Columbus on starting one of the best magazines geared towards minority men. I also have a son Cameron, who is 3 years old that I spend a lot of time with. People who know me know that I have a fixation with technology and gadgets and cannot live without them. My favorite is my Sidekick 2. I run my life and this business from it. My second is my TiVo, since I am always busy it is always nice to watch my shows when I want.