Some are talking about hubris, while others are trotting out the "wake up and smell the coffee" cliches, but it certainly seems that Starbucks is going through a tough patch in its home market. It was recently announced that 500 stores will be closed in addition to the 100 announced earlier this year and that the workforce will be reduced by 7%.
Now, it does seem that Mr Howard Schultz does have some insight into his predicament with talk of the wounds being "self-inflicted" through too much emphasis on growth at all costs and a proposed refocus on quality, innovation and service rather than over-rapid expansion.
But I then read a rather alarming comment that "the International business is cushioning the weakness in America at the moment" from Mr Schultz, who plans to license 150 new coffee shop locations in Germany, Britain and France in the next three years - with 120 of these in Germany. So, rapid expansion in Germany is going to bolster up the mistakes made back home.
Please, Mr Schultz, when you open your new stores in Germany, can you learn from your mistakes and try to do so with a little understanding of local wants and needs? You are already quoted as saying that "coffee drinking culture in Europe is vastly different than in the US". Well done, that it the understatement of the year! I, for one, have no interest in buying any of your sickly, over-priced beverages that seem to masquerade as the McFlurry's expensive big brother in order to help bail you out.
Orthodoxy is toxic
2 months ago