Up and Running Blog

It's the Economy, Starbucks

by Beth Anne Whalen on February 27, 2008

As many may know the majority of US Starbucks closed yesterday from 5:30p – 9pm for a company wide training session.  Touted as half-training – half pep-rally, Starbucks seeks to turn around their recent financial losses and their growing reputation as producers of mediocre drinks. 

Starbucks_2
With the economy on the decline, one could gather that there is also another underlying motive.  Coffee drinks (especially those that cost upwards of $4.00) are the type of luxuries people cut back on in a recession.  This is no time to be off your game.

This is a good reminder for all businesses to re-evaluate where their products and services stand in the mind of the consumer.  Estimates are that yesterday’s Starbucks training session cost the company upwards of $5 million in lost revenue.  But in context of their annual revenue of close to $10 billion, this is a good investment to safeguard against losing their customer base when discretionary dollars are tight.

Beth Anne Whalen
Director of Business Development
Palo Alto Software Inc.

About the author: Beth Anne Whalen has 13 years of sales, sales management, and marketing experience. She has worked for Enterprise Rent-A-Car, First Advantage Corporation, and Raymond James. She was also co-founder and president of www.forsalemagnets.com. More »

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  • http://www.palmit.com Cale Bruckner

    I think Starbuck’s training event was a great thing for local coffee shops and McDonalds. It forced Starbuck’s customers that haven’t tried alternatives for so long to look at their options for a better and/or less expensive cup of coffee. Starbuck’s coffee is mediocre – service even more so. I’ve also noticed lately that many of their locations are in desperate need of a facelift. I doubt the training event will produce anything more than more losses for Starbuck’s.

    – Cale (Daily Starbuck’s customer)

  • Beth Anne Whalen

    Thanks Cale! It sounds like alot of American are coming to the same conclusion. As a daily customer…I hope you see the fruits of their training soon!

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