STARBUCKS grind out losses

[mal]

Franchise coffee giants Starbucks have been cut down to size.
About 75% of Australian locations will be closed.
Starbucks Coffee Company[Australia] made the following losses
2006: $27 million
2007: $36 million
There will be various reasons mooted as to why the US franchise has made these losses.

POLL...Why has Starbucks made the loss?

A: Cost of living , rising petrol prices, customers not spending as much?

B:The minimum wage for staff in Australia far exceeds the US minimum wage?

C: Too many coffee venues in Australia?

D: Had to fail in Australia as named after a former Brisbane/Collingwood AFL footballer...?

[Leaping Lindner]

I think it's a combination of B & C.
Also the fact that a lot of people tried Starbucks once,and, having tried it once never went back. How they seriously thought they'd compete with that lolly water in a country that likes decent coffee is beyond me.

[Dutchy]

I loved Starbucks when I was in New York a few years back, thought Id give them a go when they opened up in Rundle Mall and have never been back, worst coffee in the city, even worse than Hudsons and thats saying something!!!

[Blacky]

maybe it was the sxxx coffee they sell

[Dissident]

A combination of A B and C.

The "model" they use over there just didn't fit exactly right here. No franchises either, maybe that affected them. They had a lot of business first up since it was "Ohhh, Starbucks!". It would be like "The Gap" opening up here, just to see it's like K-Mart (or whatever). The novelty wore off quickly.

I went there once, got the biggest coffee I could. Well, it was hands down the best hot milk I ever had. God knows what it would have tasted like if they managed to put an espresso shot or two in there.

Working in the city, I feel that many people treat where they get coffee, like where they get their hair cut, or their car serviced; they like familiarity. It might be the small place on the corner, the cafe that now makes coffee, the specialised place like Illy or Bean Bar, or where ever. I don't think Starbucks fit in well.

I don't care one bit they are closing. I cared more when they closed Quiznos in Pirie Street - DAMN I miss the breakfast rolls.

[Dissident]

I loved Starbucks when I was in New York a few years back, thought Id give them a go when they opened up in Rundle Mall and have never been back, worst coffee in the city, even worse than Hudsons and thats saying something!!!

Hudsons isn't bad at all! more unique than anything - a lot creamier than the other places. 10 times better than the crap Gloria Jeans serve up.

[Brock Landers]

I heard on the radio that it was mainly to do with B and C, but I like the idea that Starbucks was boycotted for being too closely related to figjam!!

[Q.]

Good Riddance. Despite it's pledges, Starbucks Corp. has repeatedly bought coffee and chocolate bought produced under exploitative labour conditions. Less than 1% off coffee is purchased from coffee farmers who are guaranteed a living wage.

[Footy Chick]

Good Riddance. Despite it's pledges, Starbucks Corp. has repeatedly bought coffee and chocolate bought produced under exploitative labour conditions. Less than 1% off coffee is purchased from coffee farmers who are guaranteed a living wage.

[wycbloods]

Good Riddance. Despite it's pledges, Starbucks Corp. has repeatedly bought coffee and chocolate bought produced under exploitative labour conditions. Less than 1% off coffee is purchased from coffee farmers who are guaranteed a living wage.

Totally Agree Quichey. Bad luck that we don't have a minimum wage set-up like the americans if you can't make a sustainable business only paying people $14-$15 per hour then that probably says something about the product you are supplying . Not that i even drink the crap anyway so i can't comment on its quality nor any of the other coffee providers.

[Q.]

Gefugged FC, I don't even look like a hippy

[Footy Chick]

Gefugged FC, I don't even look like a hippy

Who?
I know Hippys have hair

[Q.]

Gefugged FC, I don't even look like a hippy

Who?
I know Hippys have hair

Oops, force of habit FL.

Are you saying I smell bad and smoke pot? Well, it's not true, I don't smoke that shit

[therisingblues]

Interesting that this has come up.
After reading a book recently called "Starbucked" I pondered the question about its success in South Australia, mainly because when I lived in SA there were many coffee houses already and of a good standard. One of the things that got Starbucks off on the springboard to success in other parts of the world was a lack of quality competition.
I was thinking of starting a thread entitled "Coca-cola, AFL and Starbucks" and using it as an analysis of the South Australian psyche. My thinking was that the three above organisations are juggernauts that have swept all before them in whatever market they entered, but have met the most resistance in SA.
Coke is only outsold in two places in the world, and only in SA is it outsold by a milk drink (FU Iced coffee)
AFL has had more trouble dampening the spirit of the SANFL league than any other suburban footy league in Australia. Look at the figures for attendances for 2nd tier competitons anywhere in the world, the SANFL is way out ahead of any of them.
Starbucks, I never got around to doing any SA specific research on, but the headlines seem to have beaten me to it.
Is there something about South Australia that (in a few cases at least) places heart, principle, loyalty (parochialism) and quality ahead of neat, systemized, corporate packaging?
Something to be proud of IMO.

[therisingblues]

Good Riddance. Despite it's pledges, Starbucks Corp. has repeatedly bought coffee and chocolate bought produced under exploitative labour conditions. Less than 1% off coffee is purchased from coffee farmers who are guaranteed a living wage.

Actually you can blame the U.S (as by far the largest consumer of the world's coffee) for bumping off an agreement it had with the world's coffee producers that gauranteed them a minimum sale price.
There are far too many coffee producers in the world, and as with anything in a free market, when there is too much of it the price plummets.
The other main perpetrator is Vietnam, which after a major frost in the mid 70's saw coffee prices skyrocket for a year or two, ordered its population to go about planting masses of the awful tasting "coffea robusta" plant. This plant tastes so terrible that roasters leech the flavour out anyway they can, then replace it with chemicals, to make it smell like coffee. They artificially flavour it too, that's why you get cheap brands with flavours like "Almond and Mocha" of whatever. This plant grows easily, is much cheaper and produces more coffee than the traditional "Coffea Arabica" plant, which produces delicious coffee. When Vietnam flooded the market with "robusta" it had an immediate, negative impact on the world market.
The coffee makers that sell in your supermarket have a much greater influence over the market that Starbucks. Some argue that Starbucks has actually benefitted the worlds coffee producers, as they claim to only use the more expensive "arabica" plant, as opposed to supermarket brands that blend "arabica" in with "robusta". Remember "robusta" is dirt cheap and assists in lowering the world's coffee price while adding dollars to big companies.
Arguably, the best thing one can do to assist coffee producers is buy expensive, good quality, shade-grown (or bird-friendly, same thing really) coffee.

[Punk Rooster]

Interesting that this has come up.
After reading a book recently called "Starbucked" I pondered the question about its success in South Australia, mainly because when I lived in SA there were many coffee houses already and of a good standard. One of the things that got Starbucks off on the springboard to success in other parts of the world was a lack of quality competition.
I was thinking of starting a thread entitled "Coca-cola, AFL and Starbucks" and using it as an analysis of the South Australian psyche. My thinking was that the three above organisations are juggernauts that have swept all before them in whatever market they entered, but have met the most resistance in SA.
Coke is only outsold in two places in the world, and only in SA is it outsold by a milk drink (FU Iced coffee)
AFL has had more trouble dampening the spirit of the SANFL league than any other suburban footy league in Australia. Look at the figures for attendances for 2nd tier competitons anywhere in the world, the SANFL is way out ahead of any of them.
Starbucks, I never got around to doing any SA specific research on, but the headlines seem to have beaten me to it.
Is there something about South Australia that (in a few cases at least) places heart, principle, loyalty (parochialism) and quality ahead of neat, systemized, corporate packaging?
Something to be proud of IMO.

we hate new stuff- as evident by our lack of planning approval...

[Dog_ger]

10 years ago it was a good thing.

2008 you can buy a great coffee just about anywhere.

Someone made a very good living 10 years ago and every Tom, Dick & Harry followed.

I have one of those Top End coffee machines at home.

They are Fabulous. Why Buy a good coffee when at home they are fabulous....

[devilsadvocate]

Exactly Dog_ger.

Why people pay $3-$4 for a coffee (some do it 3 times a day ) is beyond me. And if you have to get one, in Adelaide there is a great coffee shop (Starbucks, GJ's etc excluded) around just about every corner. Come to the UK where the coffee is RUBBISSH except for in 2 different kiwi run shops, which are operated by a few entreprenuerial lawyers who found making good coffees brings in more coin than dealing with crims in court!

I agree though, a top of the range machine at home kicks the pants off buying a coffee or 2 every day at the branded stores and if you spend $1k buying the machine initially, saving $3-$6 per working day, your investment is recouped within the year.

Cop that Starbucks!

[Psyber]

We have a nice little Lavazza compact machine that was being sold as a promotional item around the trade at one time.
A friend of ours, who had a restaurant, got it for us at a very good price. Much better than the "home" product we had before.

[Mic]

About 600 Starbucks places have closed recently in the States.