“Starbucks sales miss estimates, shares drop despite rosier forecast” (Reuters, April 27, 2021):
U.S. sales returned to pre-pandemic levels, Chief Executive Officer Kevin Johnson said during a call with analysts.
How is this possible? If Mx. Johnson was talking about sales in the first quarter of 2021, that’s a time period when all Starbucks had closed down indoor dining, when the weather in most of the U.S. was uncomfortably cold for sitting outside, and when many American downtown offices were still vacant. How can his/her/zir/their company be selling just as much coffee as when people had the option to come in, share the bathroom with the local homeless, and sit down with the SUV-driving single moms?
If indoor dining turns out to be worthless, from a business point of view, how could Starbucks not have figured that out years ago and thereby saved itself a ton of cost? They would never have gotten into the bathroom dispute that forced “Starbucks Closes More Than 8,000 Stores Today For Racial Bias Training” (NPR) because they wouldn’t have had public restrooms.
I guess one answer is that the U.S. has changed. Customers used to demand and pay for the indoor dining space, but now they don’t want it nor are they willing to pay for it.
I’m kind of amazed that Starbucks is popular in its take-out-only configuration. So many Americans are sitting at home all day. Why do 15 minutes of driving to get coffee that takes 5 minutes to brew at home? If you’re on a long car trip, wouldn’t it make more sense to stop at McDonald’s where the dining room is open so that you can go in and use the bathroom?
Also, I wonder if this kind of business transformation will result in further fragmentation of American society. Due to its outrageous prices relative to quality, Starbucks had a somewhat upscale clientele. Nonetheless, it was a place where one might see a wider variety of people than one would see by driving in a private car from point to point. If Americans don’t see each other in common spaces, how will we know what our fellow residents of this stolen land are like?
November 2019, Hangzhou:
I’ve never understood the allure of Starbucks, the coffee is horrible and the “food” dreadful. If you suffer through that to get a WiFi connection and rest for 30 min, fine. But Takeaway? Never!
As a rule, in most Starbucks locations there’s at least one nearby Italian bistro where one can get a real espresso.
Starbucks became “hip” in the late ’90s and early ’00s because it offered to franchise owners a little bit of the panache of the “local funky coffee shop” with the back-end management and quality control of a large chain operation. So it was a “safe space” for people who dabbled in Chestnut Tree Cafe politics but also wasn’t embarrassing for the “suits” to get their coffee and breakfast, plus was run like a business, so people could invest in it. It was the Chipotle of coffee, and in fact Chipotle stole everything from them. Chipotle is about as “authentic Mexican restaurant” as Taco Bell, but the food is more uniform. Predictable. Corporate.
So for quite a long time you could walk down to Starbucks in a relatively “hipster” place but not feel too scared as an Assistant Manager of Human Resources while standing next to the guy/gal/whatever that was mounting a new production of “Too Much Light Makes the Baby Go Blind” with the local starving artist commie theater troupe, and even listen in on their conversations…you got to re-live your rebellious college years and then snap out of it when you had your coffee and got back to work in your cubicle.
I have more to say later, it’s been a busy afternoon….
I, too, don’t see the sense in spending for a cup of coffee when I can brew at home. But it’s all those other drinks…the caramel macchiato, the lattes, espressos, etc…
And many of them are drive thru, at least here in California. Fine with me. My SB stock is up nearly 4 percent.
My theory is that Starbucks spikes its coffee with a little extra caffeine, and has gotten all its customers addicted. They have to go back to Starbucks to get that extra buzz that they do not get elsewhere.
@Philg: One thing that I can think of right away is that whether or not you like Starbuck’s coffee, people become very “loyal” and actually kind of dependent on the taste they perceive from their favorite foods and drinks. Look at cigarette smokers! Starbuck’s is the same way with coffee: it’s a relatively unique taste, it’s always the same, it’s comforting. So even if people are afraid of inhaling or contacting a surface teeming with Wuhan Death Particles, they still want the same taste they’ve had for years in their coffee during those long hours of the day listening to NPR and Zooming their meetings. I say this only a little tongue-in-cheek.
I can’t remember the chef’s name, but he’s a pretty renowned “gourmet” chef, and I read an article about his thoughts on simple things like hamburgers. He makes beautiful, gourmet expensive hamburgers for upscale clients who can afford a $20-30 burger (or more). In the article he said (I’m paraphrasing): “Do you know who makes the best hamburger? McDonalds. Because they make millions of them every day, and they always taste the same. That’s hard to do.”
And once people acquire a taste and a habit, they’re notoriously hard to break. People at the bottom are creatures of habit.
Perhaps the idea is that the public space gives consumers the feeling that they are in some sort of public entity and the hope is spend money accordingly — as if Starbucks were some sort of community center or the Philharmonic. So Whole Foods in NYC typically allots an entire floor for tables presumably for eating their food. But the tables are typically occupied, depending on the location, by high school students hanging out at lunch with sandwiches from home or very bored baby sitters chatting with their friends while junior drools or beats on his/her playmate and the one near Chinatown by Chinese people gambling as well as some vagrants. So the WF fish counter typically has whole fresh fish, sometimes it looks pretty good, but i have never seen anyone buy one — though the fish display gives the illusion that the rest of the stuff in the counter is fresh — rather than defrosted out of a plastic bag. I have twice tried to buy a whole fish in WF and asked the counterman to scale and gut it and he approaches the task as if he were doing open heart surgery with a warning that it will take at least 10 min (in Chinatown they can scale and gut a fish in less than a minute) & makes a complete mess of the fish and that would seem to indicate he does it infrequently. I mean in the meat section they would probably have a pig or a cow wandering around if that were permitted.
“I guess one answer is that the U.S. has changed.”
Or they’re full of shit?
My local Starbucks is indeed back to pre-pandemic levels. Every morning the drive-through line wraps around their parking lot, and spills out to the public street.
I’m in europe and there are espresso machines everywhere in cafes, bakeries and even ice cream shops. I’m a cheap bastard and prefer not to spend 3.20 euros on a single shot at these places. Also I am a coffee weakling and like lots of milk so it’s latte macchiato for me. During the pandemic I bought my own Nespresso machine for making espresso or latte macchiato (De’Longhi Nespresso EN 500.B) – it’s small/compact and good enough for me since I just make two cups a day. The milk foamer device is easy to clean (although you must rinse it shortly after you’re done using it). I like that I can interchange the capsules with different flavors. Nespresso capsules are are bit pricey at 71 cents a shot but I’ve been buying 3rd party capsules for 17 to 21 cents and I’m loving it. It’s been churning out Starbucks quality drinks for me non stop (you can even buy their capsules if you are that addicted).
Hey GermanL…..what 3rd party capsules are you rocking?
I mostly buy Cafe Royal brand (https://www.cafe-royal.com/de-de , they also have the website in english) it’s a Swiss brand and they regular give 20% off promotions, so if you do a minimum order you get the free shipping. I found the quality (flavor) to match Nespresso’s capsules the closest. They have a lot of variety, and if you like flavored stuff they have caramel, vanilla, haselnut, and now dark chocolate.
My stock is running low so I am also going to give this other website a try: https://www.kaffekapslen.de/fur-nespresso.html
the prices also seem reasonable,
OMG serendipity department: I had this blog post on my screen a few minutes ago and a family member saw it and said: “What are you talking about with PhilG?”
And I said: “Startruck’s Coffee shops.”
“You mean Starbuck’s Coffee shops.”
“Yeah…..Yyyyyyah…YEAH!”
“In the market for an upscale EV or Hybrid SUV or Truck? Looking for a different “No-Hassle” dealership experience? Head on over to Startruck’s! Coffee, sandwiches, lunch and dinner made with organically-grown, locally sourced ingredients, select wine, and a staff of expertly trained customer representatives who can help you decide on your new luxury electric vehicle purchase.”
Just raise the price 40% like everything else & earnings recover. It’s definitely about the social status rather than the taste.
Starbucks is OK, but at home it’s Dunkin pre-ground in an Aeropress. I will fight you for my Aeropress but the coffee can be joe sixpack within reason.
Starbucks has a flagship store in New York City near 14th street in the east side. It has several levels and different areas, some of which served alcohol. It is absolutely incredible. I visited it pre-pandemic, so I cannot vouch that it is even still open or that the experience is the same, but it is all brass and glass with bright open areas, and also darker, more intimate spaces. It was also affordable, taking into account the quality of the products and the atmosphere and presentation. It was an adult Disneyland of coffee.
Check it out if you have the chance.
> If you’re on a long car trip, wouldn’t it make more sense to stop at McDonald’s where the dining room is open so that you can go in and use the bathroom?
Please keep in mind that in the McDonald’s closest to Teterboro Airport, the dining room is still closed out of “an abundance of caution”.