January 08, 2008

Schultz Back at Starbucks

It seems Howard Schultz is one of the informed readers of Earnest Observer. The company replaced Jim Donald with Schultz yesterday and it finally appears Starbucks is concerned with serious issues raised in a recent post.

From the Financial Times:

A company statement said the move was part of a set of initiatives aimed at "refocusing the company on providing customers with the distinctive Starbucks experience, and building on Starbucks' legacy of innovation."

This is a good decision for Starbucks and possibly the last chance for a company on its way to competing with McDonald's:

McDonald's is setting out to poach Starbucks customers with the biggest addition to its menu in 30 years. Starting this year, the company's nearly 14,000 U.S. locations will install coffee bars with "baristas" serving cappuccinos, lattes, mochas and the Frappe, similar to Starbucks' ice-blended Frappuccino...

The coffee chain has evolved into more of a filling station. It is now battling fast-food outlets for some of the same customers and meal dollars. Today, about 80% of the orders purchased at U.S. Starbucks are consumed outside the store. The average income and education levels of Starbucks customers have gone down, the company has said. As part of a big push into food, Starbucks sells lunch at more than two-thirds of its company-owned locations in the U.S.
-- Wall Street Journal, January 7, 2008

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