Starbucks Set to Close 600 Stores
Starbucks is going to announce the closing of 500 - 700 stores this evening. This is a huge shake-up in the Coffee world. With the economy slowing down, Starbucks was set to lose. Starbucks (SBUX) stock price has dropped to $15, yet this news may have a positive affect on the stock price.
A lesson to be learned here. Quality pays. Starbucks grew quickly and couldn’t maintain consistency in their product. Now employees pay the price. Starbucks needs to get back to the basics and train each and every employee to Starbucks standards.
If they do this, they will regain loss customers, and sooner or later the economy will rebound meaning more lattes will be ordered.
Starbucks Corp. has announced it’s closing 600 underperforming stores in the United States.
Get New Oakley Sunglasses for $69!The Seattle-based premium coffee company also announced Tuesday it expects to open fewer than 200 new company-operated stores in the United States in fiscal 2009.
The company says it will try to place workers from closed stores in remaining Starbucks.
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in this economy company’s selling extremely elastic goods like specialty coffee really gonna feel the hurt a lot. (i believe specialty coffees elasticity is above 10 but i cant remember)
Jake
I am happy to have found your blog. Starbucks is deteriorating very rapidly and there is no one to talk to there. In the past, when I saw 3 big shortcomings in service in one popular Starbucks with a key location in Vancouver, B.C., Canada, as a management and training consultant, and especially as a hospitality professional, I wanted to speak with its management to warn it. I had to waste many many hours, first calling the Canadian regional office, who re-directed me to the head office, since it is Starbucks policy that complaints have to be directed to the head office in Seattle.
After explaining the whole thing on the phone, I got a courteous thank you from customer service by email and they mailed to me two coupons for free coffees at starbucks. Nice of them, but now I see again that something is wrong right there at the top of the company. In their focus only on the financial state of starbucks, though all these intelligent people should have known, by now, that finances are successful if they take care of the basics: good management, marketing, and operational policies, and investing time in building up a good team of loyal and happy employees.
A few months ago, when they realized they had losses and that competition is taking away their clients they published big announcements about closing all stores to give their “barristas” a 2-hour training on their products and on service. Well, since then, nothing has changed for the better.
They must know very little about building up a quality team of employees, and I wonder how they ever thought that a one-shot two-hour training would solve their problem.
You may have discovered that on the web site of starbucks.com (head office, U.S.A.) they do NOT have any avenue for customer feedback. None at all. They have other links e.g. for investors, but if you wish to leave some comments which would be useful to them, for areas they have to immediately correct, you get a prompt saying that you must first register there.
A company that does not provide free customer feedback cannot succeed. I understand that the chief executives of many major companies who do have online feedback regularly access those pages a few times a day in order to see where their company is going (succeeding or failing).
I tried again today to find the right contact on their web site to relate to them my latest experiences as customer: no such luck.
And here is the experience:
1) Most of their good supervisors (?) and employees are no longer there. I surmise that this has to do with the very low pay they give to their employees. When Starbucks was on top of the charts, why did they not improve the salary scales of its people? Is it only their executives who deserve a decent wage with which they can live?
2) Last week, when I bought coffee for home at starbucks, I was pleasantly surprised to be given a voucher for a “free iced item” (coffee, tea or whatever) and then discovered they had distributed a similar one to all our homes, downtown. On this voucher it is specified that it is for the “tall” size. I went to the seaside starbucks with my daughter yesterday and we decided to take them up on their offer. First of all, all the employees there were new, with glum faces, and no hint of a welcoming look or smile. The girl made a face when I presented the vouchers. My daughter asked if her iced coffee could be decaf and that girl (+ 2 others) said a definite “no”. Their explanation was that if we bought and paid for an iced coffee they could prepare for us a decaf, but because we were paying with our free voucher, we could not have a decaf.
What sort of goodwill Starbucks offer is that? Were the girls just ignorant or had they received specific instructions from their (a) Manager or (b) Area/Regional Director, or (c) The Head Office?
I did not try phoning the Starbucks regional office because, being a consultant, like before, they would think that I was approaching them for business and not as a customer. Or they would just “placate” me, saying “thank you, we will take care of it.”
Something is very very wrong with Starbucks and I see their forthcoming demise unless they do something quick!
I do hope they will see this and read this. No normal way to contact the actual executives I have to talk to at the head office.
Claire Belilos
CHIC Hospitality Consulting Services
Vancouver B.C.
http://www.easytraining.com