A Nice Cuppa

A few days ago, Starbucks announced that its profits for this year’s third quarter were substantially lower than they were last year at this time. This may not sound like big news, but it’s the first time the coffee giant has reported a quarterly loss since it went public in 1992. The losses are forcing the company to rethink its strategy for 2009. As a result, there will be fewer store openings in the United States and overseas than it had previously projected.

For those of us who live in places where there are several Starbucks locations within a five minute walk or drive of each other, this is not much of a surprise. Yes, Americans may be lazy, and strategically positioning oneself for optimal foot (or car) traffic is smart business for a convenience product like coffee. But even casual coffee observers would probably agree that there are probably too many locations, something the company rectified. According to a recent article in the Seattle Times, that’s precisely part of what accounts for the profit results — the restructuring charges of $167.7 million associated with the closing of 616 stores nationwide.

Starbucks does not seem to think that people are fleeing their stores for competitors or because they are unhappy with their experience. Instead, company CEO Howard Schultz told the Seattle Times that customers do not have the disposable income they used to. Although spending three dollars or more a day on a specialty coffee drink certainly does add up, we’re curious and want to hear from you, especially the Starbucks devotees.

Has there been a decline in the Starbucks product, brand, or overall experience? How? Or is Schultz right in his assessment that most American coffee drinkers are cutting back because money is tight? How are you coping with your coffee addiction, whatever it is, whomever your supplier is? Making coffee at home and bringing it with you to work? Have you switched to a cheaper source of caffeine? Inquiring minds wanna know!