Not Just Coffee Keeping Starbucks Shareholders Awake
I must admit I hardly believed it myself when I wrote a sarcastic piece back in the mid-1990s about the fantastic growth of the Starbucks group. I thought the global expansion was vastly overdone and almost criminally aggressive.
And selling just coffee…and in Thailand too? They arrived here with one shop on the ground floor of Central Department Store on Chidlom just round the corner from my office then, and soon enough blanketed the city. It wasn’t that I thought Starbucks did lousy, expensive coffee or that there were not enough customers here to justify the expansion. It was both! And the craziness of it all. 60 shops in 18-36 months let’s say, and most in choice and pricey rental locations, implanting locales where it was cool to hang or be seen and where you could also surf the net or whatever. Even buy a coffee or two.
But one Starbucks round every corner? In every hospital? In almost every major condo building? Wait a minute. It would almost make sense if they sold crack cocaine or ‘ice’. But ninety-seven ways to package coffee? Who really needs it? And everywhere?
I jested then that it was a bid to improve on the MacDonald’s model; or that they might actually be buying the new shops as a giant asset play, scouting cheap land and residential homes behind the façade of a fast-expanding coffee chain. They at least were becoming the single biggest sitting tenant organisation in the world – after MacDonalds.
But for what?
Anyway, the word is Starbucks has closed more than half of its shops in Australia and watch your business section for more neighbourhood exits worldwide.
My rule of thumb for a good coffee shop? It should always be at least a cab ride away or far enough to make you think twice about walking there. And you do if it’s any good!
By the way, if you are looking for cool residential properties coming on to the market, you know where to look!
Oh! And why Australia first? Starbucks has a policy of buying, roasting and supplying all of its own coffee. So allegedly, if you as a manager/franchisee can buy good coffee across the street, up the hill, over the border and roast it yourself to save on shipping and taxes, Starbucks says: ‘No way! It’s roasted here in Seattle or it ain’t Starbucks!”
I’d sell the stock on that lunacy alone!
