Saturday, August 05, 2006

What the World Needs Now ... (Is a Frappuccino in the Mornin')

Shares of Starbucks took a quick tumble last week after the chain reported that sales in its stores open longer than a year rose by only 4 percent in July. Only 4 percent, you say. Yet, as the Wall Street Journal noted Friday, that ordinarily respectable figure is well below the 8 to 10 percent increase in same-store sales “to which investors had grown accustomed.”

According to the Journal
Starbucks blamed the July sales slip on the unexpectedly heavy demand for cold, sweet Frappuccinos in the morning, spurred by heat waves across the country. Frappuccinos take longer to prepare than most drinks because they’re mixed in blenders, topped with whipped cream and drizzled with sweet toppings. That made Starbucks’ frequently long lines even longer, driving away customers, the chain said.
Some cynics aren’t buying that fragrant explanation, suggesting that consumers are cutting back on the non-essentials or grabbing their coffee at Dunkin' Donuts now that a gallon of gasoline costs almost as much as a tall (y'know, a small) Frappuccino without the sweet drizzlings. Not so, says Starbucks chief executive Jim Donald, who
dismissed the notion that slowing sales growth is due to “macroeconomic” trends. “We’re not just a shop to buy from,” he said. “We’ve always said that Starbucks is an affordable luxury. We’re that connection that, during these times, times of concern, customers come through our doors and have the respite.”
In an effort to connect ever larger numbers of anxiuous Americans with this balm for troubled times ...
Recent expansion has brought Starbucks into more small towns, inner cities and spots off the freeway. While that has broadened its customer base, it also may leave the chain more exposed to customers who cut back on extras when gasoline prices climb and credit-card bills mount.
Not to mention the electricity bill.

We've noticed Starbucks' recent metastasization into the less affluent precincts, such as the corner of Hillcroft and the Southwest Freeway, the famous multicultural crossroads of southwest Houston, where an outlet for respite sprang up a year or so ago in a new strip center that appears to be otherwise devoted to the merchandising of cell phones. And up in the Brazos Valley, where we travel occasionally to take in the air, the chain not only has staked out three or four locations in relatively rich College Station (including our favorite Starbucks in the entire nation, adjacent to an indoor firing range), but will soon open shop in the fraying and resolutely downscale burg of Bryan next door. We see a day, not too far ahead, when even Alief is no longer Starbucks-less.

The Wall Street Journal says chain excecutives are eagerly eyeing the Frappuccino-hungry hordes in China, Russia and India and envision one day blanketing the earth with 30,000 Starbucks (only 19,000 more to go).

Only then will Satan be consigned to the dung, and a thousand years of peace reign on Earth.

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