Starbucks To Open 2,000 Stores By 2025

Bluelightspecial
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Re: Starbucks To Open 2,000 Stores By 2025

Post by Bluelightspecial »

buckguy wrote: September 15th, 2022, 6:39 am Beyond whatever mechanics they roll out for making drinks, the whole thing sounds like a new CEO setting down a mark and trying to make shareholders happy. The cold drinks probably are more iced coffee than fraps esp during morning periods—not much to change there. The employee benefits are an obvious attempt against unionization and sound like tweets rather than anything new. Deprifessionalizing the barista role may actual help foster union drives.

Starbucks has had drive throughs, kiosks, and various limited service spaces for a long time and these formats have their limitations and may work more or less well with the flow of customers dusting the day. Drive throughs become an annoyance during peak periods. The kiosks often seem low volume and some of their limited service prototypes have been failures—-there used to be a very stripped down store in Boston with no food items and only the most popular drinks—-it fit in a small ground floor space but didn’t last long.

Not mentioned here is that they have significant competition in urban areas from regional chains like Stumptown, Philz, le Colombe, as well as some strong local chains like Compass in DC and an Australian chain Bluestone that has been going national. Peet’s also has started opening stores again. Some of these competitors have done better than others. San Francisco’s Blue Bottle seems to have fizzled in its East Coast expansion. Still, most of them could easily go into various kinds suburban spaces and erode Starbucks there. They also could get their coffee featured by breakfast places which has been a common approach used by local roasters and….by Starbucks. The main point here is that they have significant competition and the goal of 2000 new outlets seems to have. Alotof potential bumps.
I laughed when I read this line "like a new CEO setting down a mark and trying to make shareholders happy". Last time I checked a publicly held company should enhance shareholder value. I would never invest in a company that didn't. But you do you.
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Re: Starbucks To Open 2,000 Stores By 2025

Post by buckguy »

Bluelightspecial wrote: September 16th, 2022, 5:31 pm
buckguy wrote: September 15th, 2022, 6:39 am Beyond whatever mechanics they roll out for making drinks, the whole thing sounds like a new CEO setting down a mark and trying to make shareholders happy. The cold drinks probably are more iced coffee than fraps esp during morning periods—not much to change there. The employee benefits are an obvious attempt against unionization and sound like tweets rather than anything new. Deprifessionalizing the barista role may actual help foster union drives.

Starbucks has had drive throughs, kiosks, and various limited service spaces for a long time and these formats have their limitations and may work more or less well with the flow of customers dusting the day. Drive throughs become an annoyance during peak periods. The kiosks often seem low volume and some of their limited service prototypes have been failures—-there used to be a very stripped down store in Boston with no food items and only the most popular drinks—-it fit in a small ground floor space but didn’t last long.

Not mentioned here is that they have significant competition in urban areas from regional chains like Stumptown, Philz, le Colombe, as well as some strong local chains like Compass in DC and an Australian chain Bluestone that has been going national. Peet’s also has started opening stores again. Some of these competitors have done better than others. San Francisco’s Blue Bottle seems to have fizzled in its East Coast expansion. Still, most of them could easily go into various kinds suburban spaces and erode Starbucks there. They also could get their coffee featured by breakfast places which has been a common approach used by local roasters and….by Starbucks. The main point here is that they have significant competition and the goal of 2000 new outlets seems to have. Alotof potential bumps.
I laughed when I read this line "like a new CEO setting down a mark and trying to make shareholders happy". Last time I checked a publicly held company should enhance shareholder value. I would never invest in a company that didn't. But you do you.
You miss the snark here. They probably won’t meet this target and there are limitations to all these formats which Starbucks management already knows. It’s a short term way to calm rage market after Schultz stepped down. They did very poorly after his last departure. Starbucks has a fairly saturated, mature business and their original core areas now have a lot of competition, some of it quite good and some of it well capitalized.
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Re: Starbucks To Open 2,000 Stores By 2025

Post by storewanderer »

buckguy wrote: September 16th, 2022, 7:27 pm
Bluelightspecial wrote: September 16th, 2022, 5:31 pm
I laughed when I read this line "like a new CEO setting down a mark and trying to make shareholders happy". Last time I checked a publicly held company should enhance shareholder value. I would never invest in a company that didn't. But you do you.
You miss the snark here. They probably won’t meet this target and there are limitations to all these formats which Starbucks management already knows. It’s a short term way to calm rage market after Schultz stepped down. They did very poorly after his last departure. Starbucks has a fairly saturated, mature business and their original core areas now have a lot of competition, some of it quite good and some of it well capitalized.
The new CEO isn't there until October 1 so I don't think this was the new CEO's idea. I think this is all the Board.

A deep recession and labor issues will be great excuses for why this plan fails.

I don't think making a pie in the sky promise to add 2,000 net new domestic US locations enhances shareholder value. Actual profitable results enhance shareholder value, and down to earth business plans that are attainable/realistic enhance shareholder value. Remember Albertsons did something like that in 1999-2000, saying they were going to add hundreds of drugstores (I have the old annual reports and can dig out the information if anyone is really interested), hundreds of new supermarkets, etc. It never happened.

I actually think Starbucks needs to focus on having fewer locations but focusing on making all locations higher volume locations. My view is as they have tried to have a saturation of locations they seem to be having problems. Staffing is a problem, hours are inconsistent, execution is inconsistent, employee attitude/labor relations has turned into a BIG problem. I think they need to get control over current operations before making a promise to add 2,000 net new locations. A crash and burn strategy absolutely will not enhance shareholder value. I am very disappointed Howard is not staying longer.

Maybe you don't see it in your region but I see it in many regions I travel to. There is a LOT of new competition for Starbucks. Customers are gravitating to that competition. For instance, Dutch Bros. absolutely rules the afternoon/evening. Not sure how busy they are in the morning but they are doing 10x the traffic of Starbucks in afternoons/evenings (if the nearby Starbucks is even open much past 5 or 6 PM). I've also never seen a Dutch Bros. close early due to lack of staff yet Starbucks in Reno area is constantly closing early due to lack of staff or being drive through only, etc. I also think in general demand for Starbucks products is starting to fall off as people start exploring various other options.

I also think a number of these supermarket licensee Starbucks are not profitable, and with staffing challenges plaguing grocers, I am waiting to see when those start getting removed. Is it better to blow 16 labor hours a day on a Starbucks kiosk that generates $500 a day in sales or move that over to the understaffed deli which could generate $500 of sales per hour if properly staffed/stocked?
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Re: Starbucks To Open 2,000 Stores By 2025

Post by BillyGr »

storewanderer wrote: September 16th, 2022, 9:47 pm Maybe you don't see it in your region but I see it in many regions I travel to. There is a LOT of new competition for Starbucks. Customers are gravitating to that competition. For instance, Dutch Bros. absolutely rules the afternoon/evening. Not sure how busy they are in the morning but they are doing 10x the traffic of Starbucks in afternoons/evenings (if the nearby Starbucks is even open much past 5 or 6 PM). I've also never seen a Dutch Bros. close early due to lack of staff yet Starbucks in Reno area is constantly closing early due to lack of staff or being drive through only, etc. I also think in general demand for Starbucks products is starting to fall off as people start exploring various other options.
It may just be different in different areas - for instance on this side of the US, that other chain you mentioned doesn't even exist. Of course, Dunkin is much larger in the Northeast as well (being that is their home territory), so that may slow some groups from moving into the area (and a couple that tried didn't do so well).
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Re: Starbucks To Open 2,000 Stores By 2025

Post by Alpha8472 »

Dutch Bros. is 24 hours in many cities in California. If there were no Dutch Bros. many of these people would be getting coffee at convenience stores.

Starbucks is too expensive for many, but in order to compete with Dutch Bros. Starbucks needs to lower their prices.
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Re: Starbucks To Open 2,000 Stores By 2025

Post by storewanderer »

BillyGr wrote: September 17th, 2022, 12:01 pm
storewanderer wrote: September 16th, 2022, 9:47 pm Maybe you don't see it in your region but I see it in many regions I travel to. There is a LOT of new competition for Starbucks. Customers are gravitating to that competition. For instance, Dutch Bros. absolutely rules the afternoon/evening. Not sure how busy they are in the morning but they are doing 10x the traffic of Starbucks in afternoons/evenings (if the nearby Starbucks is even open much past 5 or 6 PM). I've also never seen a Dutch Bros. close early due to lack of staff yet Starbucks in Reno area is constantly closing early due to lack of staff or being drive through only, etc. I also think in general demand for Starbucks products is starting to fall off as people start exploring various other options.
It may just be different in different areas - for instance on this side of the US, that other chain you mentioned doesn't even exist. Of course, Dunkin is much larger in the Northeast as well (being that is their home territory), so that may slow some groups from moving into the area (and a couple that tried didn't do so well).
Dunkin is definitely a big competition in the East for Starbucks. Caribou provides some competition in the upper midwest. Dunkin is a joke on the west coast, operationally and does not have much of a following. But the products are different. Dunkin and Caribou have what I call a "weaker" coffee. Starbucks (also Peet's) have a very very strong coffee. People seem to either like one way or the other. What is funny is as I have gotten older I actually prefer the weaker Dunkin product to Starbucks. I've lost patience with Starbucks and only purchase from them in a captive situation at this point in time (airport). At their corporate locations, what I have found is their prices keep rising, attitude of employees has turned poor, they take 5-10 minutes to pour a cup of iced tea, the employees seem more and more put off to provide the free refill with the loyalty program, they keep playing games with the straws (paper straws, little tiny straws, sippy cup lids) and they do not seem as clean inside as they used to be. I am just done with them.

Still Dutch Bros. is serious competition out west. You would be very surprised. I have not seen another chain that is able to capture so many customers from Starbucks. In the case of the Dunkin customers back east, they may have tried Starbucks a few times but were never frequent customers of Starbucks at all. They have Starbucks playing catch up trying to open new drive through units near the Dutch Bros. locations.
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