After the release of several press releases and quarterly earnings today, CEO Howard Shultz is beginning the long road of recovery for his company. These are three more signs to add to my list of the other 5 Signs Starbucks is Aiming for a Comeback.
Breakfast Sandwiches deemed a distraction- Who would have thought ‘the scent of the warmed sandwiches interferes with the coffee aroma in Starbucks stores’? If you haven’t heard already Starbucks will discontinue Breakfast Sandwiches by late 2008, due the overwhelming aroma inside their stores. Not to worry, Starbucks isn’t removing their ovens and will continue to warm pastries and is ‘committed to delivering a replacement’ for the sandwiches. (Maybe a Top Pot Donut, which announced recently they will be in all company-owned Starbucks Corp. stores in 50 states by April 8th) The only downside is that the lack of breakfast sandwiches will have ‘some revenue impact’; however ‘it’s the right decision for the company.’ This back to basics approach is one step closer in the right direction for the company.
Beating Wall Street- Starbucks reported a 2 percent higher profit this quarter, same stores sales grew by 1 percent. It is a very small step forward, but the only thing that matters is that it beat analyst’s predictions. It gets the momentum going for the upcoming quarter which will be rough one because sales slow during this time of year.
Closing down stores- While analysts talk about over saturation of the U.S. market, Starbucks is cutting its U.S. store openings to 1,175 from 1,600. This is down 34 percent from our fiscal 2007 openings. Also Starbucks is closing approximately 100 underperforming stores. I think Starbucks is realizing in order to grow same store sales they have to stop “cannibalization” from overbuilding. They know that 2008 isn’t going to be a break through year for them and they have to continue to make hard decisions in order to turn around this company.
Boring Market own Starbucks Stock.
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1 Boring Market » Blog Archive » New Day, New Promise, New Starbucks // Feb 27, 2008 at 11:58 pm
[…] have trimmed the fat at headquarters by cutting staff, are in the process of getting rid of the products that dilute the brand, and forfeited three hours of business for the entire company to make a bold […]
2 Re-Experiencing Starbucks: Update 3 - The Training « Customers Rock! // Feb 29, 2008 at 4:28 pm
[…] Phil Gerbyshak, Lewis Green, Esteban Kolsky, Kami Huyse, CB Whittemore, Suzanne Obermire, Peter Fankhaenel, and blogs CustomerServiceVooDoo and Boring Market blog. […]
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