Starbucks closing stores?

blanyon

Looks like our old mates starchucks are in some trouble.



http://www.news.com.au/business/story/0,27753,24094314-462,00.html

admin

Hi Moto - this is pretty interesting. I had thought something like this might happen for some time. I thought the CEO's comments: "While this decision represents business challenges unique to the Australian market, it in no way reflects the strong state of Starbucks business in countries outside of the United States. There are no other international markets that need to be addressed in this manner" were pretty interesting... Basically it seems that the countries where Starbucks doesn't do well are those that already have an established espresso culture [do you hear of Starbucks doing well in Italy?]. I took his comments to be an admission of that. -A

DoubleRistretto

Read the story in the Australian this morning - they got ANZ economist [Saul Eslake??] to comment and he said the decision "probably had less to do with the performance of local coffee houses than a cost-cutting edict from Seattle where Starbucks' head office is confronting the twin impact of a sluggish American economhy and a global price hike in its most important commodity - coffee beans" seems like bullshit to me - they hadn't been making money in Australia for years! dR

admin

Hi dR - had a look at the article, and yes, seems pretty funny to me that the first [or only] person they went to for comment was an economist. I think the main point is that Starbucks had never done well in this country. In fact the feature itself mentioned Starbucks 'accumulated losses' since 2000 as 140 million! Bottom line is - I never believed Starbucks would do well in this country because of our strong and established espresso culture: see comment on our new website: www.cremamagazine.com.au! -A

Reschsmooth

This is interesting, and I personally suspect that part of the reason for the "demise" of Starbucks Aust is not so much due to the better alternatives available, but more due to the jingoistic, anti-American view that has developed over the last decade or so. Macdonalds, Kentucky, etc, have been here for so long that the consumer experience is largely ingrained. Starbucks, however, landed here in the last 5-10 years (I think), at a time when we really started to develop this anti-American vibe - when Vegemite, Arnotts, etc were sold off to US interests. In addition, when Americans joke about the proliferation of Starbucks stores (remember that Simpsons episode?), the environment was ripe for Australians to turn their backs on Starbucks. The quality of their product didn't help. I would still argue that the average punter is not surrounded by quality, local, small business alternatives, and, further, the local punter wouldn't have a clue.

DoubleRistretto

Hi Patrick - not sure I agree - most people I talk to complain about the quality. If you look at the comments on the thread on the Australian article, there are a few which talk about the American 'fast food' angle, but a lot more talk about the price or the quality, or both. dR

Reschsmooth

Hi Patrick - not sure I agree - most people I talk to complain about the quality. If you look at the comments on the thread on the Australian article, there are a few which talk about the American 'fast food' angle, but a lot more talk about the price or the quality, or both. dR

I have never had Starbucks, so can't comment on the quality, but anecdotelly, I understand the quality is rubbish. However, when you consider the alternatives, of which I have been to a few, the quality is also rubbish - overextracted shots, reheated milk, etc. But people are sucked into the idea that the bloke with the tight black t-shirt or the girl with big boobs pulling very bad shots in a "local" cafe makes great coffee, because the know the customer's name, etc. I would hazard a guess that, to use Ashley's statistics (which I don't disagree with), if you compared 90% of the cafes' products to a Starbucks product, the quality would be comparably bad. However, the fact that one is an American fast-food style franchise possibly sways people to opt for the local rubbish. I have done no research on this, it is just my point of view, which could be wrong.

admin

HI Patrick - great to hear from you; have to say I agree with DR on this one - I get the feeling the anti-American thing waxes and wanes a little, but it's been around for years - probably since the Vietnam war. The Australian did a follow up story today, and they did interview a consumer in Adelaide who they quoted as saying she 'preferred supporting local companies rather than multinationals'

beangroundanddrunk

Anyone know whats going to happen to all the shop fittings and equipment? Could do with a couple of their retail display shelves, condiments stand and a couple of spare blenders in my place!

askthecoffeeguy

anyone know what is going to happen to all their staff - there's a massive shortage of qualified baristi in the industry, and the closure of so many star-schmucks stores may go a long way towards addressing that problem - I should I've spent $1000 advertising for staff so far this year! Pat

admin

SMH reports the stores closing in Sydney as follows: Martin Place, Harbourside Shopping Centre [Darling Harbour], Market Street and George Street in Sydney and Miller Street in North Sydney, plus two Starbucks stores in Bondi Junction. In outer Sydney, Ambarvale, Blacktown, Parramatta and Carlingford and in regional NSW, Ballina, Erina, Port Macquarie, Lavington and Glendale. All Starbucks in South Australia [3], Tasmania [1] and ACT [4] are reported to be closing. In all, NSW loses 28 of its 38 stores, while Victoria will lose 17 out of 22, and Qld 8 out of its 16. Feel free to contribute more detailed info about Vic stores. -A

Reschsmooth

HI Patrick - great to hear from you; have to say I agree with DR on this one - I get the feeling the anti-American thing waxes and wanes a little, but it's been around for years - probably since the Vietnam war. The Australian did a follow up story today, and they did interview a consumer in Adelaide who they quoted as saying she 'preferred supporting local companies rather than multinationals'

blanyon

Interesting article following on from the starbucks closures regarding the closure of cafes in Aus http://www.smartcompany.com.au/Free-Articles/The-Briefing/20080731-500-more-cafes-tipped-to-close-after-Starbucks-shutdown.html?source=cmailer

fattylateplease

Hopefully Hudson's is next. God their coffee is shocking.

askthecoffeeguy

Hopefully Hudson's is next. God their coffee is shocking.

yes - but if the big guys are falling over, complete with their massive purchasing power, market presence, and advertising dollar, what does that say about the ability of the little guy to compete? p

groundsforcoffee

Starbucks have to be congratualted for their pick of stellar sites around Australia - a great way to gain exposure in a tight-knit espresso community. Unfortunately, with incredible locations come incredible rents. A lot to sustain! There are always opportunities to change and adapt to any market - no matter where the concept comes from. Starbucks were aware of the Australian view on their coffee (weak, watery, etc) but stood strong and maintained an international stance on consistency - it's a shame they didn't adapt, they may have survived. On the other hand: great news for locals!!!!!!!!!!

admin

Hi guys - not wanting to overdo this Starbucks closure thing, but a few days ago, I was interviewed on ABC Radio about it, and said that we [the Crema team] never thought that they'd do that well in Australia, because we had such an established espresso culture here. Looks like a few days later there are a lot of newspaper reports echoing that feeling. As one newspaper website stated today:

admin

well their stores may not be doing too well downunder at least] but it looks as if their instant blend is doing pretty well - in the US see: http://seattletimes.nwsource.com/html/coffeecity/2012524921_starbucks_instant_coffee_sales.html

DoubleRistretto

any updates on the bug 'chuck' - I thought I read somewhere that they're starting to expand again, at least overseas?