The Fall of Starbucks?

I remember in high school English courses my teacher describing the heroic epic and how it usually plays out. The hero discovers his path and then eventually takes it reaching a height before falling and then redeeming himself. Take a look at any of the major works out there which can be considered heroic epics and you'll see that this is the general flow of such stories. It's funny that it could also be applied to the retail world and specifically to Starbucks as well. Now I won't call the story of Starbucks a heroic epic but it does have elements that lend themselves to some amount of drama and intrigue and with the latest happenings with the company, there is a chance for it to take an even more dramatic turn in the near future.

As I've often said in my older blogs, Starbucks is becoming so ubiquitous in some parts of the country that you can't not walk into one. The chain which began modestly in Seattle has exploded into a worldwide phenomenon that has changed the way many people spend their leisure time out of the house. Coffee houses have been the norm in Europe and other parts of the world for many years but until Starbucks came on the scene here in the States, the coffee house was seen more as a place for beatniks and the like. Starbucks helped change that image forever and became a cultural icon for a new generation that appears to get it's fix from java as opposed to endless cans of soda.

Starbucks started out at a time when there was no other competition like it. They offered up various combinations and permutations of coffee that very few places (outside of fancy fancy restaurants) could provide. I doubt that most Americans knew what a latte was until Starbucks made it a common utterance around the nation. Being so specialized, it wasn't any wonder that so many people simply accepted the high prices that Starbucks charged for their coffee. To use a comparison to cars (one of my other favorite topics) Starbucks could be compared to a Ferrari. It costs a whole lot more, it's not necessarily practical but for a time it is a welcome escape. Coffee from other places (McDonalds, Dunkin' Donuts, and even gas stations) may be infinitely better but the fact that you can get it double shotted with no whip and soy milk is what makes it appealing to lots of people. Starbucks is the equivalent of shopping at Nordstrom while every other coffee out there can be compared to shopping at Target. Sure the things are similar but it's more about prestige.

Well with the economy going the way it is, people are looking more for cost cutting rather than reckless spending (which is a good thing). Despite urging from the Federal Reserve and Wall Street for consumers to spend, it's kind of hard to do so when you don't know when the other shoe will drop and the market may take another minor nosedive. How does this affect Starbucks? Well, they have literally exploded across the nation which is good but their prices continue to climb which is bad. Now places like McDonalds and such have started offering similar (though not as 'lovingly made') coffees in their stores in an attempt to woo back customers who would otherwise be sitting in a Starbucks store. And their attempts are working too. Their target? Parents.

Why would a parent make a stop in Starbucks before making a trip to McDonalds to get food for the kids when you can pick up a hazelnut coffee in the same place as the food? I mean it's great and all that Starbucks offers food but how many people have you actually ever seen eating something in a Starbucks? They generally go in, grab some coffee and then get out. I have only ever bought food from Starbucks a handful of times myself. I can probably even tell you what I bought each time if I stop and think about it. Starbucks is also starting to get worried about these types of facts now too. You can tell when they are firing the CEO and bringing back the man, Howard Schultz, who originally started the Starbucks boom. They are hoping that the 'magic' he brought to help grow the company into the giant it is today is still with him. It might be a case of too little too late.

Starbucks is great, I still can't get all the same coffees that you get there at other places. I enjoy the atmosphere the music and most of all the people that generally occupy such places. Now I won't say I go there only for the ambiance or company but I do go there because though I'm not a hardcore coffee coniseur I am cognizant enough of what i like and what I don't. Having had some of the coffees at McDonalds, I am impressed but I find it a bit lacking when all that is done to make their specialty coffee drinks is to squirt syrup with water and then pour over ice. Starbucks may be more expensive and do much the same thing but there is a difference. Starbucks actually grinds their beans and brews the coffee they use in their mix. It's a minor thing but enough to make a world of difference in flavor. Starbucks has never advertised this fact but has left it up to consumers to assume on their own they way they assume a Ferrari is a better car than a Scion. Still, not everyone can afford a Ferrari and if Starbucks doesn't get the lead out and increase their sales and decrease their costs, they may find themselves going the way of DeLoreans.