Starbucks' Woes

Tuesday, July 08, 2008

On July 1, Starbucks said it would close 600 stories in the U.S. The move reflects the company’s growing economic woes as a result of a plunging stock price and penny-pinching customers. In “Tall Order” (in the July issue of Condé Nast Portfolio), David Margolick looks at whether C.E.O. Howard Schultz can save the company he founded 37 years ago.


David Margolick

Comments [26]

Richard from Texas

I have never cared for Starbucks coffee, so except for concern over more lost jobs, this does not sadden me a bit. The only thing I respected Starbucks for is not going union. Unions had their time and place, but they don't belong in today's economy.

Jul. 08 2008 05:34 PM
Conrad from New York City

Starbucks has terrible service. One random employee fills an order three customers down the line while another random employee floats by to ring up the bill, or not. Often no one bothers to charge customers and I've seen frustrated, irate customers leave without paying. No wonder they are loosing money. I go to Duncan Donuts.

Jul. 08 2008 02:44 PM
Leon Freilich from Park Slope


Expand too much

And you're hardly the first

To see your balloon

Stretch and burst.

Jul. 08 2008 01:16 PM
hjs from 11211

he should ask for a raise or get a new job.

Jul. 08 2008 01:09 PM
GW from NYC

I do not mourn for Starbucks...They have been a predatory company which set up shop on the same block as existing independent coffee shops--which served far better coffee--trying to force them out of business. Then Schultz pretends to be a concerned citizen?? Please!! I go to Starbucks only when a friend wants to meet there because I do not enjoy overpriced, burned coffee served by slow, supercilious staff. In Penn Station there are two Starbucks...when there are at least three stores selling better coffee (plus three Starbucks within a block, on the street). They deserve to have to close stores...the more the better.

Jul. 08 2008 01:09 PM
Riley from Manhattan

Thank you for bringing on this guest. I am a current starbucks partner and he addressed many of the issues i would have had you interviewed me. I appreciated that he covered the automatic espresso machines (I prefer the manual ones), the fact that starbucks is anti-union( abhorrent), and starbucks gossip website (one of my faves).

P.S. Leonard, I would be honored to serve you your short coffee.

Jul. 08 2008 01:09 PM
Ginny from Hoboken

My son is a shift supervisor at a Starbucks in Ohio. He opens (or closes) and takes the money to the bank, but other than that he does exactly the same work as everyone else, just with more responsibility. He gets $.50 more per hour and yes, shares the tips. Without the tip sharing his take-home pay would be less than his colleages.

Jul. 08 2008 01:01 PM
Zak from Brooklyn, NY

I appreciate the point of the guest regarding barista-ing being an actual career. It's interesting, b/c I feel like the coffee in the mom-n'-pops isn't as good as in other places because of the economics. Simply, one cannot live in NY on barista wages long enough to become really good at it. In contrast, Seattle, a much cheaper city that actually honors its baristas and pays them (relative to the market) a better wage, has better coffee.

Jul. 08 2008 01:00 PM
Liam from East Elmhurst

Amen, brother.
Oh, Monica, beautiful Monica, I can hear that John Phillips Sousa...let's talk patriotism!
Right, O'Reilly?
Who cuts their checks?

Yeah, this guy is here to shill for a BIG TAX BREAK FOR HIS FRIEND....

Jul. 08 2008 12:56 PM

As an ex Starbucks partner, I worked as a shift supervisor and received tips. The reason we got tips is that we ran the stores but only made a dollar or two more than the entry level position. But the wording in the job title claims that we were agents of management. The supervisors (who are not Asst. Managers or Managers) should still get tips.

Also, when I departed from the company I had no stock - one of the benefits I was promised when I began five years before. The stock fell below what they wanted to pay us and so I was given a handful of squat for all of my time, effort and dedication.

Jul. 08 2008 12:55 PM
SRD from Prospect Heights, Brooklyn

It is a shame for all of those people who will be losing their jobs (and benefits), but I am not sad about losing their coffee. I never liked starbucks, even before i knew what REAL coffee tastes like. I'm glad in a sense, because i like to support local business, with good coffee.

Jul. 08 2008 12:55 PM
susy from manhattan

the stores are always dirty. the furniture in starbucks looks like it's been slept on by 10,000 hobos.

There's always dirt, grime, coffee, and sticky stuff all over all of their stores.

The answer is simple, you want more business... keep your shop clean!

Starbucks' 'great' product is nothing if I can't stomach going in there to order it.

Jul. 08 2008 12:55 PM
Charlie Brown from The Funny Pages

So all of this happens after Starbucks bulls it's way through and knocks out the "Mom-n-Pops".
There are now that many MORE people out of jobs and opportunities. Wonderful! Yes, let's give huge corporations more tax breaks for "development".
Good grief!

Jul. 08 2008 12:54 PM

pike roast terrible -- don't go there anymore. (they only sell that now)

Jul. 08 2008 12:54 PM

can't understand why there are so many starbucks in nyc when what we really need are more citibanks.

seriously though mcds coffee is much better. dunkin even better.

Jul. 08 2008 12:54 PM
Liam from East Elmhurst

Mule spinnings coffee with dirt!

Jul. 08 2008 12:52 PM
hjs from 11211

is starbuck coffee any good? (i don't drink coffee)

Jul. 08 2008 12:48 PM
Chuck from NJ

Starbucks tastes nothing like coffee in Italy. What’s with that?

Jul. 08 2008 12:47 PM
judy from NYC

The sad thing is that in Madrid they are forcing out the local coffee shops that actually serve good coffee.

Jul. 08 2008 12:47 PM
John from New York

Good riddance! Starbucks has done to coffee what McDonald's has done to the hamburger.

Jul. 08 2008 12:44 PM
hjs from 11211

there goes the NYC real estate market! :(

Jul. 08 2008 12:43 PM
Liam from East Elmhurst


Jul. 08 2008 12:41 PM
markbnj from

3rd attempt to post...

I predicted in my blog (here) )
that the first casualty would actually be dunkin donuts.. see entry for info

Jul. 08 2008 12:39 PM
hjs from 11211


Jul. 08 2008 12:17 PM

I think one of the issues Starbucks has is that they forced everyone to make great coffee to keep up with them. I live in Queens and commute to Manhattan and very good coffee seems to be ubiquitous. Even when regular plain run of the mill delis give you a choice of several flavored coffees. Even the breakfast carts now provide good coffee. As a result, there is not as much of a need for people to go to Starbucks for good coffee.

They clearly realize that and I am sure they have enough smart people at their company to turn it around. Most people who criticize Starbucks and their strategy would not have had the imagination to conceive of the idea of a Starbucks to begin with.

BTW Dunkin Donuts has the better coffee and they put the milk and sugar in the coffee for you. :-)

Jul. 08 2008 12:05 PM
Liam from East Elmhurst

Well, there you go again.
Tax breaks for wealthy corporations.
To expand expand expand...OOPS! Economy crashes!!!
Now, more tax breaks for them because they are losing money (never consider the poor unemployed workers-no lobby!).
Remember, Monica, play the John Phillip Sousa louder and distract with global terrorism.
The terrorism is that these companies like they and all the other Walmart types expand too much and this is inevitable. PUT IN PLACE TAX DIS-ENCENTIVES and hire from the unemployed they so adeptly provide with their poor business ethics.

Jul. 08 2008 12:04 PM

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