a curious girl in a curious world..

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25th January 2008

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Speaking of McDonald’s… it recently announced the biggest addition to its menu in decades – the barista. Its 14,000 US locations will install coffee bars starting this year, serving lattes, cappuccinos, mochas, and Frappes. This is very, very bad for Starbucks. Starbs has already seen diminished growth last year even before the reinvention of Dunkin Donuts & McD’s as specialty coffee makers. They are blaming the slowdown in consumer traffic on “pressures on consumer spending.” I personally think it’s from market oversaturation (how long can they keep seeng amazing growth? How many Starbucks is too many? In my hometown there are 3 within a quarter of a mile from each other. On Astor place there are two across the street from each other.) Either way, SBUX shares have lost half of their value in the past year. See the above graph (McD’s blue, Starbucks red). So what is Starbucks doing to combat this? Testing $1 cups of coffee in Seattle. With free refills! And they’re bringing Howard Schultz (former CEO) back. Should be an interesting year for Starbucks, so stay tuned. To honor it I’ve started reading Schultz’s book.

Speaking of McDonald’s… it recently announced the biggest addition to its menu in decades – the barista. Its 14,000 US locations will install coffee bars starting this year, serving lattes, cappuccinos, mochas, and Frappes. This is very, very bad for Starbucks.

Starbs has already seen diminished growth last year even before the reinvention of Dunkin Donuts & McD’s as specialty coffee makers. They are blaming the slowdown in consumer traffic on “pressures on consumer spending.” I personally think it’s from market oversaturation (how long can they keep seeng amazing growth? How many Starbucks is too many? In my hometown there are 3 within a quarter of a mile from each other. On Astor place there are two across the street from each other.) Either way, SBUX shares have lost half of their value in the past year. See the above graph (McD’s blue, Starbucks red).

So what is Starbucks doing to combat this? Testing $1 cups of coffee in Seattle. With free refills! And they’re bringing Howard Schultz (former CEO) back. Should be an interesting year for Starbucks, so stay tuned. To honor it I’ve started reading Schultz’s book.

Tagged: economics

  1. three50eight reblogged this from dihard and added:
    will bounce back...summer months. I might not be...dilligent...
  2. thatgirlgwen reblogged this from dihard
  3. rapnyc reblogged this from rachelanastasia
  4. gosushi reblogged this from dihard and added:
    Excelente o Tublr “dihard”! (para quem lê inglês). Espero que a quantidade/qualidade dos Tumblrs também comece a invadir...
  5. peterclark reblogged this from dihard
  6. yaffa reblogged this from dihard and added:
    interesting how they mirror each other more or less.
  7. complex reblogged this from dihard
  8. daveklonke reblogged this from dihard and added:
    I wish I could remember where I read it, but someone summed it all up perfectly: “Starbucks wants to be McDonalds and...
  9. thefamouschronicles reblogged this from dihard and added:
    So does this mean that Starbucks is the new McDonald’s? Or is Starbuck’s the new local diner? Ha ha ha ha ha ha ha ha...
  10. rachelanastasia reblogged this from verbadjectivenoun and added:
    Ugh, it’s time to sell my stock. It’s depressing seeing how much it was worth a year ago compared to now.
  11. verbadjectivenoun reblogged this from mareen and added:
    I won’t say too much as this is my employer - but I will share with you that Canada, and other international markets are...
  12. boutofcontext reblogged this from dihard and added:
    The Economist has a good piece called “Coffee Wars” that discusses this McD v. SBUX battle. It confirms over-saturation...
  13. mareen reblogged this from dihard and added:
    Mareen says: McCafé is doing pretty well in Germany. And honestly, I like their coffee better. The way they serve (same...
  14. dihard posted this