It seems that a lot of people, myself included, have been wondering what Starbucks is doing. The reintroduction of the original logo left a lot of people scratching their heads. I’m not sure what it means, nor do I like it visually– I’m not sure who does. Anyone?
The general vibe out there is that Starbucks is floundering due to people pinching discretionary spending in response to rising gas prices and 70’s style stagflation. So I was actually interested for once to have a look at this particular annual report which came in the mail. It shows that growth is still strong at Starbucks on the revenue side. From 2005 to 2006 Starbucks added $1.4B in new revenue, from 2006 to 2007 they added $1.8B.
My friend Miche said yesterday that, “Starbucks should be the Target of the coffee world.” By that he meant how Target’s brand is that of affordable chic, and with the growing preference of independents in major cities and the possible loss of some brand caché, maybe this is what they need to do in the US.
Howard Schultz seems to be taking a more evolutionary than revolutionary approach: “The transformation agenda we are implementing includes improving our U.S. business by introducing new, exciting products and programs for our partners, and store enhancements to increase our focus on the customer. Immediately, we are slowing the pace of our U.S. store growth and closing under-performing locations. We are accelerating expansion and increasing the profitability of Starbucks outside the U.S. We will reignite our emotional attachment to our customers and restore their connections with our coffee, brand, partners and stores. And we are building for the long-term—both in ensuring our support functions are focused fully on advancing the customer experience, and expanding our exceptional international success story.”
Despite watching Starbucks’ stock lose half its value since I bought in, I’m sticking with him… for now. I’m interested to see what happens, and I think Howard gets it.
What do you think?