I’m curious for people’s reactions to this story: There’s a Caribou near my office that does pretty well. It’s in a suburban area with lots of offices, ergo lots of yuppies buying coffee. There’s been some development in the area, and a few new commercial developments are spouting up. CBOU recently opened another store literally across the street from the first. I can’t really explain the setup, but it’s not like this is a case of both sides of the street being really busy. Turns out they opened the new store simply to stop any other coffee shop from opening across the street. This from a company that is currently closing unprofitable stores because they expanded too quickly.
SBUX is taught to no end in my entrepreneurship classes. You hear about the “experience” constantly. Thats all they have. Everyone drinks their crap because it makes people feel sophisticated and it has the image of being cool. Once people find the next trendy thing to do, SBUX is screwed. I think in the past few months a blind taste test came out and Mcdonalds Premium Roast Coffee and Dunkin Donuts Coffee came out on top. SBUX coffee ranked at or near the bottom from my recollection. I still can’t believe that at the Mall of Millenia (Orlando, Fl.) there are two SBUX. One on each floor and both can be seen from the middle rotunda. They still have a ton of those sophisticated types lined up out the store whenever I go there.
HoldSideAnalyst Wrote: ------------------------------------------------------- > I’m curious for people’s reactions to this story: > > There’s a Caribou near my office that does pretty > well. It’s in a suburban area with lots of > offices, ergo lots of yuppies buying coffee. > There’s been some development in the area, and a > few new commercial developments are spouting up. > CBOU recently opened another store literally > across the street from the first. I can’t really > explain the setup, but it’s not like this is a > case of both sides of the street being really > busy. Turns out they opened the new store simply > to stop any other coffee shop from opening across > the street. This from a company that is currently > closing unprofitable stores because they expanded > too quickly. In Charlotte, there are 2 in the Overstreet Mall which connects Wachovia and BofA, along with a Starbucks. There are probably 30 boutique stores in this mall/walkway. Caribou seems to capture the customer a little better, ie longer lounge stays. Comparing the other Starbucks in uptown Charlotte to Caribou, it is almost like they took the experience away from them. Starbucks is a Dunkin Doughnuts now, grab and go. (at least in this market setting)
JoeyDVivre Wrote: > The McD’s comparison for SBUX doesn’t work for me. > McD’s sells lousy food of known quality for cheap > prices. speak for youself! I’d could go for a quarter pounder right now!
Niblita75 Wrote: ------------------------------------------------------- > They still have a ton of those > sophisticated types lined up out the store > whenever I go there. That would be wannabe sophisticated types who really don’t know anything.
I used to go to SBUX alot and probably spent $25-30 a week there. Then they made us poor canucks PAY for wireless. That was the only reason I went! I go to local shops mainly now as they still see why I was going to SBUX, not so much for the coffee, but free wireless!
Agreed. Thats what I meant. I do however like their iced coffee drinks every now and then from a gas station. Thats the only Starbucks that I buy. By the way, is Caribou mainly up North? I have never seen nor heard up them until this post
Niblita75 Wrote: ------------------------------------------------------- > > > I still can’t believe that at the Mall of Millenia > (Orlando, Fl.) there are two SBUX. One on each > floor and both can be seen from the middle > rotunda. They still have a ton of those > sophisticated types lined up out the store > whenever I go there. And the one on the first floor used to be Barney’s. What’s that tell you. Niblita— I thought there wouldn’t be anyone else on here in Orlando. Do you work downtown?
“The McD’s comparison for SBUX doesn’t work for me. McD’s sells lousy food of known quality for cheap prices. People go there because they know exactly what they will be getting (arterial plaque), how much they will pay for it, and that it will satisfy fat cravings and keep them full. SBUX sells burned up coffee by telling people over-roasted beans are higher quality and that if they pay $5 for a coffee, it must be good coffee. Both are really stupid.” The MCD comparison certainly does work. MCD is about to eat SBUX’ lunch so to speak. Just take a look at MCD’s stock over the last three years. They are remodeling the stores in a manner that is consistent with the look and feel of an “upscale” coffee joint. Wi-Fi, stainless steel, etc., and remodels are still a small percentage of the store base. They already have the doors and haven’t even scratched the surface when it comes to offering “premium” coffee drinks. The problem with SBUX is that the model is changing. Square footage growth will have to slow, which means the top-line will come under pressure, this all occurs at the same time their cost structure is going up–national advertising will boost SG&A. This pattern repeats itself all the time with retailers. If you listened to their call management all but named MCD as one of the “other competitors” impacting its business. The stock is getting cheaper at around 18x, but earnings risk still seems high and a lot of people still want to “believe”. I remember seeing SBUX several years ago, they were telling investors that their coffee was an affordable luxury that people would never give up during tough economic times. Now they are saying that traffic is down because of the economy.
having recently visited Seattle, there are much better coffee shops in that city than starbucks-crap-excuse for my morning caffine fix. why didn’t one of those places make it big!? the world would be much better off (well, at least the coffee would).
robo: I live in Orlando (Windermere really), but I am currently finishing my last semester at UF.
There is a SBUX and a Burger King squeezed together at the airport in LA. That is the best-case-scenario future for SBUX.
Niblita- doing the web based program there or commuting. I have a friend starting the web program in january up there in championship city. You wouldn’t happen to be taking L1 in Miami in a couple weeks, would you?
So drs was a SBUX buyer a few months ago. Where is he now? (he still might be right, I don’t think so but what do I know)
I’m just your average student here. If I had to commute from Orlando to Gainesville every other day or so, I would kill myself. The drive is just terrible for some reason, and thats going home once every two months or so. I passed level 1 already. I took it in Tampa this past June.
im not going to hide and I won’t lie either. I still hold the small holding that I had the last time we discussed this. Long term, I still see value in it. If the consumer gets hit during this credit crunch/housing downturn it will be interesting to see the pricing power SBUX has. Will it be able to pass on price increases? Or will $4 lattes end up being a discretionary expense? Time will tell.
drs Wrote: ------------------------------------------------------- > im not going to hide and I won’t lie either. I > still hold the small holding that I had the last > time we discussed this. > Gee, I’ve never held a stock that went down. Yeah, right. > > Long term, I still see value in it. If the > consumer gets hit during this credit > crunch/housing downturn it will be interesting to > see the pricing power SBUX has. Will it be able > to pass on price increases? Or will $4 lattes end > up being a discretionary expense? Time will tell. Home mortgage or $4 latte? Hmm…home mortgage or $4 latte… Well, if I don’t pay the home mortgage the govt will just bail them out…
All their growth has come at the expense of their balance sheet, or I should say the landlords who fund their stores. Add back $4 billion in operating leases and the company’s balance doesn’t look so good. ISBUX won’t survive if expensive coffee treats become less fashionable… but don’t worry, a TV ad campaign will fix that. I should post on yahoo. I’m a good stockk basher.
But has anyone tried one of the new McD’s espresso drinks?
SBUX may not be the king of coffee forever and I woudlnot touch the stock but when I am in a new city and I want a good coffee done the way I want it SBUX trumps based on good ( not great) quality and truely excellent consistency. Some what ammusing: SBUX seems to be doing very well out on the West Coast even in the burbs. In down town Vancouver they have two SBUX kitty corner to each other that are jammed 24/7 and the third corner is a Terafatzioni which (if I am not mistaken) is at least patrially owned by SBUX b/c they use the same cup size names, share MANY drink names and prices. In Victoria there is an SBUX and a Terafatzioni literally next door to each other on the main tourist strip. All the hippies who claim to hate starbucks have gravitated to this Terafatzioni, little do the know …( right pinkey raised to lips)…