November 13, 2007
Is Starbucks in Trouble?

Of course it is. I've raised this point more than once. I love Starbucks. But its growth potential is being arrested - not only by market saturation (or so say the mainstream analysts), but by the price of the product itself in an era where recession and hyperinflation will make $5 coffee a very unnecessary luxury item that consumers will cease to purchase.

Alternatives are popping up: Tim Horton's, McDonald's, Dunkin' Donuts, and others. And for far cheaper. The Starbucks experience - a great ambiance to read, surf, or chat with friends - will eventually give way to more affordable alternatives when consumers can no longer pile up coffee and scones on their credit cards. I've already become Starbucks elastic. I have my home Barista, and I am rather frugal with my out-of-house coffee budget.

Recently, I went to a new competitor in the neighborhood: Beaner's Coffee. So I go there and order a latte, basically the same type of thing I get at Starbuck's or any other coffee shop. A tall (smallest size) latte with an extra shot, plus sugar-free syrup, non-fat milk, extra hot, with whipped cream. The price is $4.03 at Starbucks. So here, at Beaner's, it was $4.54. What? So I asked the young gal cashier, "Do you charge for whipped cream?" She said, "Yes, 50 cents." !!!!!!! Of course, I like whip cream on my coffee - it's a must - so I will never go back. Then, when they gave the coffee cup to me, there was no hand protector or lid on the to-go cup. I looked around and noticed they put the protectors on the counter and the lids on a condiment table several paces away. So, with my hands full with purse and keys, I had to fumble for a lid and throw on a cup protector. I was amazed that they make the customer chase down their own cup accessories, especially after charging steep prices and tacking on another 10% for whipped cream. The coffee was excellent but I will never go there again. That lack of simple service was unacceptable.

Posted by Karen De Coster