Starbucks closing 600 stores in the US: Financial News
Starbucks Corp. has announced it's closing 600 underperforming stores in the United States.The Seattle-based premium coffee company also announced Tuesday it expects to open fewer than 200 new company-operated stores in the United States in fiscal 2009.
The company says it will try to place workers from closed stores in remaining Starbucks.
Group finds Starbucks logo too hot to handle,
A Christian group based in San Diego found grounds for outrage over the new retro-style logo for Starbucks Coffee.The Resistance says the new image "has a naked woman on it with her legs spread like a prostitute," Mark Dice, founder of the group, said in a news release. "Need I say more? It's extremely poor taste, and the company might as well call themselves Slutbucks."
Starbucks' headline-making brand recreation is a bit tarnished today by an adverse court ruling. As decided in California, the company owes baristas about a hundred million dollars in tips that were distributed to shift supervisors and managers. The coverage makes it look like corporate was stealing from their workers. The L. A. Times, for example, leads by saying that "Starbucks got caught with its hand in the tip jar."
The practice might have been illegal under California law, but it wasn't stealing. If baristas (oops, I mean "partners") didn't like the practice they were free to work elsewhere or renegotiate terms. It's also a sensible way to do business: if supervisors spend most of their time doing the work of baristas and cashiers, there's no reason for them not to get tipped out with the other workers. Restaurants with on-the-floor managers who serve tables do exactly the same thing.
Assuming Starbucks' compensation model is effective, this ruling won't change much. It's a one-time bonus for baristas who get to take advantage of a stupid law and a one-time hit for the corporation that's getting nailed by it. It could lead to raises for supervisors to compensate for lost tips and will likely slow down pay increases for non-management positions. It doesn't do much of anything to change incentives, except perhaps to make managers less invested in running fast, friendly stores. This isn't a victory for workers' rights; it's a forced replacement of a business model that was working well to another, possibly less efficient one demanded by court decree.
How fast and how far will Starbucks rollout its newly acquired Clovers? Answer: real fast and real far. The Seattle Post-Intelligencer reports:
Many stores will be getting a Clover, but probably not those with low foot traffic or short hours, Gass said. Very busy stores may get two. About 30 percent of U.S. stores will get Clovers by year-end, Schultz said.
In another article -- does any other newspaper devote so much space to coffee coverage? -- a discouraging sign about the future of Clover sales to indie shops:
[Clover founder Zander Nosler says,] "When I first wrote a business plan, it did have the idea of Starbucks in it. And I was told early on, 'You'd better not write a business plan that has one customer, because you won't raise much money with that.' So we made a plan that involved going out to the world, to everybody."That's precisely what Schultz didn't want -- so he bought the company.
I can't fault the guys for selling. They got a dream offer, and they certainly deserve it for all their hard work, vision, and ingenuity. But still, looking at all the potential the Clover holds for changing the way people think about coffee, it would be a shame to see Starbucks get it exclusively. Unfortunately, I suspect Starbucks Corp. sees more advantage in keeping Clover brewers to itself and to the few early adopters that already have them. Let's hope I'm wrong...
I'm working in a Starbucks -- instead of Peets because Peet's won't get wireless.
There's a guy in here with a new Mac Air. Oh, that thing is beautiful!
I told him if he charged people a dollar to touch it he could probably pay for it in a week.
Oh no. I just parked myself in a Starbucks to work for a while. I forgot that it's Christmas music time. Oh no. Oh no. And I already bought my half-caf Americano (extra roomy). Oh no.
Param-pa-pum-pum.
I try to avoid Starbucks this time of year. Sure it's nice to stop in,but Christmas music all the time... The poor baristas, having to listen to this all day. Why don't they form a union?
Peet's WHY oh WHY can't you get wireless?
This morning started out pretty grey. Grumbling my way to work I decided to stop at the local 'Buckys' to grab a latte. I walked in the door and like magic, voila, my day was immediately improved. During the night the little Bucky Xmas Gnomes had been busy with all the Xmas marketing. Adorable stuffed toy penguins were there in little red coats; teddy bears with little scarves; blue shiny snowflakes around the colorful displays; shiny xmas mugs; advent calendars: You name it, it was there - and it was cute. I am a sucker for cute.
I managed to get by the adorable 'stuff-I-want-but-do-not-need', and there in front of me in big stacks by size, were red cups. I even exclaimed out loud as I saw them. "The red cups are back. Oh good! That's so great" and the baristas mentioned that yes they were nice and bright looking, probably thinking "good lord who is this dork". But nice and bright is not it. The fact is that every year at this time, the cups at Starbucks go from white with the green logo on, to some kind of red design, and every year it makes me happy. It nothing to do with coffee. The coffee was still the slightly too sweet but warm and fuzzy-feeling-making, with a faint taste of coffee, but the environment was delightful.
And the cups are RED!
I have more frequently been having disappointing experiences at Peet's lately. Coffee has on occasion seemed watered down. This morning in Redwood City it was very thin.
In the past there was an occasional problem where they would forget to turn a switch on a machine, and the decaf coffee could be made half-strength. This is because at a certain time of day they start using half as much coffee, because they sell fewer cups. So they put half as much ground coffee in the machine and change a switch that causes half as much water to be used. But if they forget to throw that switch the result is the same amount of water used on half as much coffee! The result is of course half-strength coffee. Sort of like a brown water -- or a Starbucks.
But this is not what has been happening lately. I have good reason to believe that - at least at Redwood City - the manager has started using more water and less coffee ON PURPOSE! So is the corporate management starting to reduce the quality of Peet's coffee, or is this just a local phenomenon in one store?
If the coffee is going to be weak I can go to Starbucks - and at least get wireless.
"I came to the richest country in the world, so why are they drinking the lousiest coffee?"
Alfred Peet, founder of Peet's Coffee & Tea, died Wednesday at 87.
Peet's: Alfred H. Peet, 1920-2007 (with comments and pictures),
When Alfred Peet opened his shop in Berkeley in April, 1966 he started a coffee revolution. Nobody had ever seen top-quality coffee like this roasted in this unique style in America.Washington Post, Alfred Peet; Put Buzz In Gourmet Coffee,
Alfred Peet, 87, a Dutch tea trader who started the gourmet coffee craze in the United States with his rich, darkly roasted, high-altitude beans and taught the trade to the founders of Starbucks and sold them their first year's supply, died Aug. 29 at his home in Ashland, Ore.San Francisco Chronicle: Coffee pioneer Alfred Peet dies,His company, Peet's Coffee & Tea, from which he retired in 1983, announced his death. The cause was not reported.
... Coffee aficionados swear by Peet's, asserting that it is superior to mass-merchandised products. In 1971, when the three founders of Starbucks decided to open a gourmet coffee store in Seattle's Pike Place Market, they sought Mr. Peet. He insisted that they go to his store to learn about coffee before he would sell them a single bean...
... Peet's is bean-sized compared to Starbucks, but it has played a significant role in the development of the U.S. coffee culture.
With his emphasis on specialty coffees and unique brewing techniques, Peet, the son of a Dutch roaster, put specialty coffee on the map - and in the process influenced the founders of Starbucks.Seattle Times, Coffee master Alfred Peet, 87, inspired Starbucks,"Up until the time he started, in 1966, basic American coffee was swill," said Jim Reynolds, roastmaster emeritus at Peet's. "His father had been a small coffee roaster in Holland before World War II, he was aware of good quality coffee, but nobody in the States was buying it," Reynolds said. "He realized Berkeley was a place where good food and good quality coffee would work."
... "I like to think that he taught America how to drink dark-roasted coffee," said Narsai David, the food and wine editor of KCBS in San Francisco, who, when he opened his Narsai's Restaurant on Colusa Circle in 1972, was Peet's first commercial account.
... In 1971, the first Starbucks store opened in Seattle's Pike Place Market, with coffee roasted by Peet's. The company's co-founders, Jerry Baldwin and Gordon Bowker, learned about roasting from Peet.
Peet sold his business in 1979 but stayed on as a coffee buyer until 1983. In 1984, Starbucks co-owner Baldwin and Reynolds, the roastmaster, with a group of investors bought Peet's four Bay Area locations. In 1987, Baldwin and Peet's owners sold the Starbucks chain to focus on Peet's, and Baldwin and Howard Schultz, Starbucks' new owner, entered into a no-compete agreement in the Bay Area. In 2001, Peet's became a public company.
Alfred Peet was born in Alkmaar, Holland, on March 10, 1920. He helped his father by cleaning his coffee-roasting machinery and doing other odd jobs. When Germany invaded the Netherlands, he was pressed into working for the Third Reich in Frankfurt. When the war ended, Peet joined Lipton, the tea company, and for a time worked in the tea business in the then-Dutch colony of Indonesia.
He immigrated to San Francisco in 1955 and took a job with coffee importer E.A. Johnson & Co. He favored high-altitude coffee from Costa Rica, Guatemala and East Africa that his father used to buy, and although there was no market for it in the area, he decided to create one.
The chain is switching its default milk for espresso based drinks from whole to 2%. That's fewer calories, but also less fat to provide structure and sweetness. Don't give in! Or better yet, go to coffee shops that really know their craft, order a smaller drink with full fat milk, and enjoy.
Explanation for the title here.
[Via Starbucks Gossip. Cross-posted at ER.]
I would never encourage you to buy Starbucks coffee. But if you want to take some, that's another matter entirely. You can do so tomorrow from 10 to noon.
[Also at Eternal Recurrence.]
I'm working at a Starbucks (because Peet's doesn't have wireless). For about an hour they were playing classical Christmas music, but they just put on "parum pa pum pum again." I can not STAN parum pa pum pum.
Rum pa pum pum
Rum pa pum pum
Sheesh. Gotta go. It's beginning to look a lot like working at home for the next three weeks.
Let me know if this is true.
At Huffington Post today, Daniel Goldin: The Worm in the Coffee Bean: Starbucks' Union-busting, Greenwashing,
In fact, all of Starbucks' retail employees work part-time (the company includes management in its statistics), with no guarantee even of the twenty hours needed to stay on the company's part-time worker health plan. ... a little research revealed that in the area of insurance Starbucks fell short of WalMart, insuring only 42% of its workers (this figure also includes management), against WalMart's 47%.Leave comments.Even more alarming is Starbucks' union-busting policies. Starbucks new CEO Jim Donald hails from -- you guessed it -- WalMart, as well as Safeway, companies famous for playing hard-ball against unions, and he seems to have imported similar hard-scrabble tactics to the running if Starbucks.
The IWW recently won a settlement against Starbucks from the National Labor Relations Board in response to charges against the company for illegal union-busting policies, including firing workers for union activity.
... The presence of a union hurts Starbucks' "progressive" brand by implying that its workers have grievances. The company's official line is that it is already committed to the well-being of its "partners." Why join a union, it tells its employees, when we're looking out for you?
This "noblesse oblige" argument that a corporation can internalize a feeling of obligation toward its workers -- as well as toward the environment -- and regulate itself, is at the heart of the "Corporate Social Responsibility" movement or C.S.R..
...Who's right? Is Starbucks a good corporate citizen -- or a lousy one?
I'd like to echo this post from Starbucks Gossip the other day: Starbucks Gossip: When will Starbucks get serious about diabetes and obesity? (And take a look at the huge comments thread there.)
Yes, there are customers who want the sugar drinks and pastries - and that's great, but there are also customers who want ALTERNATIVES!
Whole grain pastries and sugar-gree alternatives, please.
By the way, I used to always get soy lattes, until I learned how many calories are in those. Now I get an Americano and add a bit of half-and-half.
Starbucks raises expansion goal to 40,000 stores,
Starbucks Corp. on Thursday raised its long-term expansion goal to 40,000 stores from 30,000 and said it was nowhere close to exhausting opportunities in North America, even as possibilities appear internationally.The company, known for its ubiquity in parts of the United States, expects to have 20,000 outlets in the United States and 20,000 internationally, James Donald, chief executive, said in a meeting with analysts in Seattle.
Here I am at a Starbucks, when what I'm really craving this morning is a Peet's. But I have to work, and Peet's just will not get wireless!
So I'm having a Starbucks half Sumatran, half-decaf Sumatran. It's OK. It's not a Peet's. Usually when I have to work I get a Starbucks Americano with extra room, beause thast is a strong drink, and I miss my Peet's less. But Peet's just won't get wireless, so I give my money to Starbucks. Go figure.
When I said in the last post that the logic behind the name of the Starbucks Caramel Macchiato is "known only to a room full of lame marketers," I was wrong. My decidedly non-lame friend Wendy knows the truth and reveals it in the comments:
You can have a latte macchiatto, though, right? Where the milk is poured first, then marked with foam. Macchiatto doesn’t have to do with the amount of milk, but the marking. Most people get an espresso machiatto — an espresso marked with steamed milk. But there is such a thing (outside of the siren’s realm, even) as a latte machiatto. This is where the inspiration came from, because the Caramel Machiatto (insert registered trademark sign here) is steamed milk marked with both espresso AND caramel. It’s still misleading, yes, but not quite in the way you think.
Do you realize what a brilliant inversion this is? It's as if Starbucks was publicly admitting, "We're not a coffee company anymore, we're a milk and sugar company. But sometimes we'll mark our milk and sugar drinks with coffee so you can feel good about ordering them for breakfast." I love it! I will no longer mock the company for the silly name of this drink now that I'm aware of the genius behind it.
Wendy also reveals that Starbucks once required all its employees to wear tie dye shirts for its 25th anniversary celebration. Weird.
And lest I defame Wendy, Seattlite and coffee lover, by portraying her as an all-out Starbucks apologist, I'll link to her eclectic list of top five coffee experiences. None of them involve caramel, frappe powder, or the whir of a super automatic espresso machine.
[Cross-posted on Eternal Recurrence.]
A hot issue on my own weblog has been DC's much contested ban on smoking in bars and restaurants. Of course, I prefer market solutions to an all-out ban, but even some of my usually libertarian readers argued that there was a "market failure" at work in the bar scene that made the ban acceptable. Some posts on the subject are here and here.
Tying this back to coffee, I followed up with a post about Starbucks' success at introducing smokefree coffee shops into heavily pro-smoking markets around the world. I didn't find anything authoritative on the subject, but I did uncover some interesting anecdotes and speculated on why Starbucks could offer smokefree options so rapidly while American bars seem slower to change. If you'd like to read the post or offer some feedback, check it out here.
I'm in the Starbucks at the corner of Shattuck and Ceder, in Berkeley, California, using the wireless. It's here that you'll find Andrew the Singing Barista. A Frank Sinatra tune was playing and he was singing along, sounding JUST like Frank! He's very good. I suggest you go in, ask for Andrew, order something expensive, ask him for a song and leave a NICE tip!
Maybe they could set up a small podium - it could become the new Starbucks thing, Singing Baristas. Andrew could be the leader of the new Big Thing!
At Starbucks Gossip: Is Starbucks cranking up the music to annoy the wi-fi crowd?
I'm in one of my typical blogging postures - parked outside a Starbucks, with a fresh Peet's coffee. Peet's doesn't offer wireless but I can get it here in the Starbucks parking lot. It has been a busy time at the pesky day job, and the cold is still going on, both of which have been keeping me from blogging much here, and I'm looking for people interested in sharing this blog. Let me know if you love coffee, tea, dark chocolate and are intereted.
Meanwhile I tried a special Ghiradelli dark chocolate the other day -- that I can't find on their website! I'm pretty sure it was a 72% cocoa bar, that I got at a local specialty shop. It was very, very good.
So, darn it, I'm ging to have to go back to the same place and buy another bar to taste so I can write about it here! The trouble I go to!
Dave and I come from often opposed ends of the political spectrum. He runs a "red meat" progressive weblog, while I'm loosely affiliated with the libertarian public policy scene in Washington, DC. But we're united by our desire to cross ideological boundaries and by our love for great coffee. So when Dave invited me to write a guest post on "a libertarian perspective on coffee," I was intrigued.
By way of an introduction, I should note that I'm not a full-time policy analyst. I left the 9-5 think tank world a couple years ago to work behind the bars at two of Washington's top coffee shops, places committed to elevating coffee and espresso preparation to a culinary art. In this world, Starbucks is an apparent nemesis, replacing skillful baristas with automatic machines, driving indie coffee houses out of business, and submerging its burnt espresso in heaps of milk and syrup.
Yet as a libertarian, I'm tend to have a more optimistic view of culture, seeing a corporation like Starbucks as, if not a hero, at least as a neutral or relatively harmless force amid robust and dynamic consumer preferences. I shouldn't denigrate the company just because it's big and successful. After all, it succeeds by offering people a product they want and willingly purchase.
So what's a guy like me to do? If I find that my generally favorable view of consumer culture falls apart in the area I happen to care most about, that's a real test of my views. So after talking with Dave, we decided a post about Starbucks' ambiguous role in promoting cafe culture would be a good place to start thinking about libertarianism and coffee.
In other business news, Starbucks Gossip has an Advertising Age report, Starbucks and Kellogg to test-market cereal offering to test-market:
special Starbucks cups filled with Kellogg low-fat granola, ready for steamed milk or special add-ins.
Starbucks Plans to Launch Iced Coffee,
Starbucks Corp., the world's largest specialty coffee retailer, on Wednesday said it plans to launch Starbucks Iced Coffee, a ready-to-drink product, in grocery stores and company-owned locations later this year.The company plans to launch the iced coffee drink at its stores in late March, followed by grocery and convenience stores, which will sell regular and light varieties nationally starting in May.
OK, another great issue of our time, and this one really is a great issue of our time: recycling.
I always bring my coffee cups and plastic tops home so I can put them into the recycling.
But what are the thousands of local Starbucks doing? There was one locally that set up recycling bins, but I haven't seen them there lately. Can anyone report on their locals?
Starbucks Gossip says that they're now making the cups out of slightly-recycled (10%) material. I found verification of that here. But the Organic Consumers Association isn't impressed,
Environmentalists applauded Starbucks' move, but said that the company should do even more if it is serious about being a green company."It's a helpful start, but 10 percent recycled content is minuscule," said Dr. Allen Hershkowitz, a senior scientist at the Natural Resources Defense Council. Starbucks said it was using only 10 percent recycled material partly because the material costs more.
eXtension IT: Coffee Shop Etiquette? weighs in on the great controversy of our time.
And while we're on the subect, Fair Trade from The Organic Consumers Association (OCA).
Starbucks Everywhere has photos and an incredible ist of Starbucks visited.
From Starbucks Gossip: Is Starbucks the "blue-state" Wal-Mart?
Ah yes, the premier question of our time. Starbucks or Peet's? Let's start the discussion right at the start of the blog itself. Let no one say that the Smelling the Coffee blog avoids the tough national controversies! In the future we'll have Starbucks and Peet's proponents writing here, and lots and lots of stories about the great independent coffee shops and roasters around the country.
I'm sitting in a Starbucks writing this, drinking a half-caf (but watery) Americano. Not to fault Starbucks Americanos, though, because I order them for a reason -- that they're almost as good as a regular old Peet's coffee (to me), for when I just have to sit at a table and get work done. You see, Peet's doesn't have wireless Internet service for computers! Can you even imagine that? And Peet's doesn't even begin to understand coffee-shop atmosphere. So for work, it's Starbucks.
