Starbucks to close 600 stores

Starbucks has announced that it will close 600 stores and reduce its 2009 expansion plans by half. This is a major move for the chain which is famous for its aggressive expansion plans. All the stores due to close are located in “major U.S. markets”, perhaps Starbucks technique of opening multiple stores in the same location is beginning to struggle.

Price increases and economic struggles such as the rising cost of gas have resulted in reduced takings for the coffee company who’s Chief Executive Howard Schultz returned to his former position as CEO in January. Schultz has said that while some employees will lose their jobs attempts will be made to give as many as possible work in remaining stores. Up to 12,000 workers jobs are at risk.

“By far, this is the most angst-ridden decision we have made in my more than 25 years with Starbucks, but we realize that part of transforming a company is our ability to look forward, while pursuing innovation and reflecting, in many cases, with 20/20 hindsight, on the decisions that we made in the past, both good and bad.”

Howard Schultz

Coffee to go is increasingly being seen as an unnecessary luxury by Americans who are paying more than ever for gas and food. (Those of us in the UK who pay the equivalent of $10+ per gallon for petrol can relate). It cannot be a good economic indicator that Starbucks is actually closing stores rather than just opening less! At this rate it will only be the super rich (who always seem to be photographed with the iconic Starbucks cup in hand) who will be able to afford a Grande Cappuccino.

Starbucks offers free Wi-Fi

As of today Starbucks will offer its customers a little something extra along with their daily cup. In a bid to underline their reputation as the ‘third place’ (work, home, coffee shop). Starbucks is keen for it’s customers to linger (as long as they’re buying), and they know that what their customers want is internet access.

All those who use their ($5) Starbucks card at least once a month will be able to enjoy 2 hours free Wi-Fi a day in store. This has been seen by many as an attempt to lure back customers who are cutting down on their spending on coffee due to the worsening economic situation. Brad Stevens, vice president of customer relationships has said:

“Customers have let us know they want to be recognized for choosing Starbucks. Particularly at a time when budgets are tight.”

This comes not long after Starbucks reintroduced a modified version of their original logo to celebrate the release of their retro Pike Blend Roast.

Photo by Csaba Bajko.

New Starbucks Logo

Starbucks has recently been using a new brown logo. As those of you who read my previous post a few weeks ago (or just remember!) will know, this is actually the old logo. This has been reintroduced as part of their Back to Basics’ campaign. It coincided with the release of the ‘Pike Place Blend’ which was named after the original Starbucks store in Seattle. The original twin-tailed siren or mermaid is slightly more exposed than in the classic green logo.

A ‘nation wide Christian media watchdog’ called ‘The Resistance’ (ha!) have got their knickers in a twist over the logo:

“Starbucks has recently introduced a new version of their logo which features a topless mermaid with her legs spread, which has caused outrage from a nation wide Christian media watchdog organization. The Resistance, with has over 3000 members nationwide, is boycotting Starbucks across the country saying their new logo is inappropriate.”

Starbucks is reportedly seeing a slow down in their profits. This is most likely due to the rising cost of gasoline/petrol. This is not the first time the cost of car fuel as effected the sales of human fuel.

*Update* This is the new logo, the one above is the original which is, as you can see, slightly more…exposed.

Friday links: Carla Bruni, Kobe Bryant, Heather Mills, Starbucks and Pitchfork TV

What do Carla Bruni, Kobe Bryant, Heather Mills, Starbucks and Pitchfork TV have in common? They all feature in my first ‘Friday Links’ post! Every Friday I’m going to post some news events or just links to interesting things which have happened during the week. Here goes.

Carla Bruni has been in the news quite a lot lately after her visit to the UK with French President Nicolas Sarkozy. The ex-supermodel proves that the French are just sexier than us Brits. A nude photo of Bruni taken by Michel Comte was auctioned off at Christie’s in New York for £46,098.

Troubled Basketball star Kobe Bryant can jump over a moving Aston Martin.

Heather Mills has been awarded a writing credit on the Beatles classic Eleanor Rigby.

Starbucks have tired to boost slowing sales by releasing a new blend called Pike Place Roast. The blend is named after their first store and has been described as “nothing too objectionable”. The coffee giant have also changed their logo back to its original incarnation.

Pitchfork.com, the best music review site online has launched a web TV channel called Pitchfork.tv. Early highlight include an exclusive Radiohead performance of Bangers & Mash and an interview with Swedish singer Robyn.

How coffee should taste.

I’ve just read an interesting article on the Times website about the quality of coffee here in the UK and overseas. Jeremy Torz, who is the co-founder of Union Hand-Roasted was bemoaning the size of the drinks offered by the main retailers. Apparently the large, very milky drinks favoured by much of the population came about as a way of being able to charge more for our daily cup.

“It would be difficult to sell a small 6oz cappuccino, the traditional Italian size, for much more money, so to make a viable business out of it, they started to make the drinks bigger. And how do you do that without overdosing everyone on caffeine? You add more and more milk.”

Photo by Csaba Bajko

The result is that all the wonderful flavours traditionally found in coffee are swamped by lots of sugary milk. This could be seen as a dumbing down of the flavour, instead of complex notes we get just plain old sugar. People seem to like it however, coffee sales have never been so high. Even independent coffee houses are benefiting from the influx of Starbucks, Neros and Costas around the country.

These are the tastes and aromas which coffee tasters look out for:

Here is what an average Latte provides (can you tell I have a degree in art?)

Torz suggests we are become more choosy about who prepares our drinks

“Watch your barista and see how much attention he pays, if he can’t do a standard espresso right, no amount of milk is going to make it any better.”

Black Gold.

Apparently smaller, independent coffee shops actually benefit from nearby Starbucks stores. The theory goes thus:

Starbucks makes people who wouldn’t normally bother, try fancy coffee. These people are turned into caffeine zombies requiring a daily fix. The long waiting times and the exorbitant prices force these consumers to look elsewhere and they discover the little family run place next-door which has been there all along.

I can remember a time when my home city didn’t have any national chain coffee houses. There was just one local place which specialised in coffee and a load of cafes where you could get an bad to average cup dispensed by an old lady who had never even heard of crema.

I don’t often buy take-away coffee as I can make my own at home and at work but when I do I normally get it from one of the three big chains who now dominate the high street here. I find that the staff in this store are actually polite and attentive. The staff in the independent coffee house are often too busy thinking about how cool their dishevelled hair and I’ve-been-to-Thailand-on-my-gap-year jewellery looks (answer: not at all) to actually make my Mocha in under 10 minutes.

Anyway I’m not too bothered where people buy their coffee from, anybody selling something with a 400% markup is probably making more money than me. (Although what the growers are making is probably a different matter altogether).

All this reminds my of a joke by Lee Mack (and probably a hundred people before him) “I like my coffee how I like my women: hot, dark, from a street corner and for not more than £2.50.”