Starbucks falls from its capitalist stardom

When Starbucks finally took possession of our city’s busiest street corner, the collective groan of indifference could have been heard as far…

When Starbucks finally took possession of our city’s busiest street corner, the collective groan of indifference could have been heard as far as the coffee giant’s headquarters in Seattle.

Not that Starbucks would care.

Indifference won’t, after all, stop people from buying their coffee; it just means nobody thinks their town has arrived anymore when the ubiquitous green and white mermaid shows up and starts getting bossy with its Italian cup sizes and Alanis Morissette tunes.

The mermaid is drowning in mediocrity — and is paying the price.

This week, it announced 600 of its US stores will close.

Analysts say the public company, which will layoff or transfer 1,200 baristas, or seven per cent of its global work force of 172,000, with the closures, is a victim of the US recession.

But some say it only has itself to blame — for growing too big, too fast, and for quickly turning pop culture’s icon of haute coffee into just another overexposed and overpriced brand name.

In a tightening budget, the $4 latte has to go.

And it’s easy to let Starbucks go when the greedy company continues to charge the prices it does — pompously, on every major street corner and often across the street from itself — when times are tough.

We are getting a little bored of Starbucks anyway.

For years, it seemed we couldn’t watch a movie without the product placement of Starbucks’ recognizable white paper coffee cup with its green circular stamp.

And suddenly, we couldn’t enter a bookstore or mall without finding ourselves inside a cramped, mini version of one of its shops.

We even found a Starbucks in Whitehorse planted at the butt of a dismal strip mall at the foot of a Wal-Mart parking lot wondering if our summer RV tourists could really be counted on to support the espresso culture of the big city.

“For much of the past 15 years, Starbucks executives were known for their rigour in selecting locations,” writes the New York Times (see story on page 22).

“Starbucks looked past commonly used demographic information to analyze nitty-gritty specifics, like the education level in various neighbourhoods.

“It also studied traffic flow on both sides of each street, to make sure drivers could make an easy turn for their java fix on their way to the office.”

Starbucks, a shining example for capitalists everywhere, let itself get dumb with greed.

Still, despite appearances, it is barely slowing down — only restructuring a little in these tough economic times.

As part of its corporate restructuring, it will open a mere 200 new stores in the US next year instead of a planned 400 stores a year between 2009 and 2011.

These and other decisions are being made by Starbucks’ founder, Howard Schultz, who returned to the company as the hands-on CEO in January to deal with plummeting stock prices.

On Monday, the stock closed at $14.95, which is less than half what it was worth a year ago, and one-third of its peak value of two years ago.

It is the first time Starbucks has traded below $15 since late 2003, when it had 7,225 stores worldwide.

Now it has more than 16,225 shops, including more than 11,400 in the US and 640 in Canada.

Schultz is reportedly going to get the company refocused on quality rather than expansion.

He started a few months ago by closing all US stores simultaneously for a barista retraining session aimed at improving the demeanour of staff and the cleanliness and comfort of its stores.

He will also introduce a healthier smoothie and increase automation, according to the Economist magazine.

It reported Starbucks recently bought Coffee Equipment Co., “a small outfit that produces a hugely expensive coffee-making machine called the Clover.”

What nobody is reporting is that increased automation suggests the company will try to save money by relying on fewer staff.

In 2004, Starbucks announced it was going to double the pace of its growth. Most of the stores slated for closure were opened after 2006.

It’s sad to think that while the business world is mourning the lost of its corporate star, our city got its second Starbucks just around the time Zola’s closed down the street.

The independent coffee shop sold fair trade coffee and was an active supporter of local art and culture.

But Starbucks, with all its so-called woes, can move onto the busiest corner of the city and operate a half-empty store until late in the evening and nobody in that corporation blinks an eye.

Starbucks is not closing any of its 640 company-operated stores in Canada.

I suppose that’s a good thing because that means no layoffs in this country.

I just hope with the increased popularity of fair trade coffee and increased public awareness of the need to support small, independent businesses that Canada will at least enjoy some level of Starbucks stagnation.

I don’t want to see another Starbucks on Main Street.

 Juliann Fraser is a writer living in Whitehorse.

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