The Starbucks Insider

Seattle area stores are testing out a short drip coffee (8 oz.) for $1. They are also testing out going back to free refils on drip coffee while you’re in the store. A few ways to keep people in the store, and also create a lower barrier to entry. The dollar menu was made popular by McDonalds, so maybe this is Starbucks way of saying you come after us, we’ll come after you.

I don’t know how well an eight ounce coffee for a dollar will sell, especially with all of the orders to go these days, but it’s worth a shot, and if it’s succesful it will be a great marketing tool.

WSJ Article

No Comments »

Here’s a great interview done by Andy Serwer at Fortune Magazine.  He talks with Howard about why he came back, what is going to change, what the biggest points of focus will be over the coming months and years.  Some great questions and answers to give a little more insight into what Howard is thinking than a one sided memo.Here’s a few of the tidbits that jumped out to me; 

• Howard talks about better rewarding their loyal customers.  That 15% of purchases are on a Starbucks card.  Does this mean a rewards program of some sort?
• Howard is not a fan of the fact that Starbucks turned its focus to efficiency from experience.
• He won’t take the easy out and blame their recent performance on fears of a recession. 
• In regards to food.  He says, “Less could be more” meaning that they could be cutting back on their pastries.
• There were 4,000 people at a company meeting for when Howard announced that he was coming back and he received a standing ovation.

  Great interview with alot of insight.  What do you think Starbucks needs to focus on, cut, change in order to turn things around?Fortune Interview 

No Comments »

Saw this piece from Head Butler talking about what has gone wrong with Starbucks over the past however many years, and why it is bad for all of us.  I may disagree with a few points here and there, but overall, it is a great article. Starbucks, used to be the coffee house that brought everybody together, and now, with its cookie cutter, poor performing stores there is no longer this one location.  Can Howard bring back the real “Starbucks Experience” that will have people calling Starbucks the third place again, or is it to late? Head Butler article on January 17  [via The Huffington Post]

No Comments »

Starbucks will now be carrying a new type of juice in their RTD (Is that what it’s still called?) case. Naked Juice, which is owned by Pepsi, will be the new expensive juice of choice inside your local Starbucks.

Not a huge shakeup as the two juices are very similar, but I will be a little dissapointed the next time that I am sick and can’t get a C Monster to help fight off the cold.

Do you even care about this move?

AP Story

No Comments »

Starting in a few weeks Starbucks will no longer be offering organic milk as an option for their drinks. Since Starbucks has now made the switch to only milk that is from cows who don’t use growth hormones they feel that there is no need to offer the ogranic choice.

According to Michelle Glass, the SVP of Global Strategy;

Far and away, the No. 1 reason people are purchasing organic milk is because [it lacks] the growth hormone

Seems to make sense for Starbucks to take the crganic milk choice off of the menu, especially since it only accounted for less than 1% of their drink orders even before the move to their new milk.

What do you think, should they keep truely organic milk as an option in the store, or does the move away from growth hormone’s do enough?

As a side note, it will help with the coffee aroma in their stores. Have you ever smelt freshly steamed organic milk? No thanks.

WSJ Story

No Comments »

Todd Wenning over at Monley Fool has just named SBUX as the worst stock pick for 2008. He lists a few reason, and draws a correlation between Howard and Michael Jordan, and although I disagree, I think he makes some valid points for why the stock won’t rebound in ’08.

“Diminished competative advantages” and “Watered down experience” are his two reasons. They are both valid concerns, and in all honesty, they’re what I think Howard noticed not being taken care of while he was gone that made him step back. Wenning, brings up a great point that I wondered about when I read, “Pour Your Heart Into It” a few years ago;

According to Schultz’s 1997 book Pour Your Heart Into It, franchising was “almost a forbidden word to Starbucks.” “We refused to franchise,” Schultz said, “Although it would have been tempting to share costs with franchisees, I didn’t want to risk losing control of the all-important link to the consumer.”

Ironically enough, just one year later, Starbucks introduced its first “licensed” location at Albertson’s grocery stores. Even though licensed locations in stores such as Target (NYSE: TGT) and Safeway (NYSE: SWY) helped Starbucks expand and kept financial costs down over the past decade, the initiative may end up costing the company brand value in the long run. These locations, after all, are not the typical Starbucks “third place,” but simply “refueling stations” for sluggish shoppers who need a caffeine boost before spending money.

I think that fixing this is priority number one for not only the SBUX stock, but also to create a better astmosphere to work in and make your third place again.

How do you think the stock will go this year? Howard’s back, McDonalds is coming on strong, and the price of milk has increased… what will this all mean?

No Comments »

Sounds like Howard and Jim Cramer had a talk about what the plans for Starbucks are over the future, and after talking with Mr. Schultz Jim Cramer became a fan. Glad to hear he is back on SBUX’s side as the stock needs all the help it can get.

Seattle PI Story

No Comments »

If you go to Starbucks.com (as of 1/13/08) you will be welcomed by an open letter by Howard Schultz talking about his passion for Starbucks, his taking over of the CEO position, and how Starbucks will be making the Starbucks Experience a major point ofemphasis. It’s a good PR move and I think that the “Starbucks Experience” is really what Starbucks needs to bring back in order to regain the confidence of their customer base as well as Wall Steet.

Since the memo will probably be removed from the main page shortly I will post the entire message after the jump.

Continue Reading »

No Comments »

Found these mockups over at Mac Rumors, for what the potential iPhone patented quick ordering could look like. It looks like it would work really well for people who know what they like and don’t like. However, with the notes, and all of the variations people add to their orders it seems like it could be a big disaster if put in the wrong hands. Maybe they should have an online test you have to pass before being able to order this way.

More pictures can be found here

No Comments »

While reading the press release to announce Howard coming back one of the biggest tidbits in my opinion was the agenda layed out at the end of the document.  The first point seems to be the most important for the company, and from what I understand about Howard, the item he is presumably most passionate about.

– improving the current state of the U.S. business by refocusing on the customer experience in the stores, new products and store design elements, and new training and tools for the Company’s store partners to help them give customers a superior experience;

Closing stores, refocusing the customer experience, and better training the partners will all lead to improvements in the stock, as well as the overall experience for people when they visit a Starbucks.  I’ve very excited to see how this shapes up.

One thing I know Howard hates is the smell of the breakfast sandwiches which take away from the aroma of coffee inside a store.  I wonder how this smell will be phased out, because even though the breakfast sandwiches are money makers, they don’t help the overall Starbucks Experience.

Press Release 

No Comments »