Starbucks’ stock is down nearly 11% today and the primary reason is that the $4 cup of coffee is being cut out of a lot of people’s daily routine. One of the first thing that personal finance strategists tell people to cut things like Starbucks out of their budget.
Starbucks, in the midst of rolling out new initiatives aimed at luring more customers into its vast network of stores, pegged fiscal second-quarter earnings at 15 cents a share, below the consensus analyst target of 21 cents, according to FactSet Research.
For the quarter ended March 30, Starbucks said it had a “mid-single decline” in revenue at U.S. stores open at least one year, a key retailing metric known as comparable-store sales. The downturns in the California and Florida housing markets have hurt company sales, according to Starbucks. Combined, the states account for 32% of its U.S. retail revenue.
“The current economic environment is the weakest in our company’s history, marked by lower home values and rising costs for energy,” Chief Executive Howard Schultz said in a statement.
Have you cut Starbucks out of your daily routine?
April 24th, 2008 at 10:57 am
We are all cutting back. It’s a stunning thing that people will drop $4.00 for a cup of coffee ( a couple times a day) but complain that they have to pay $3.50 or $4.00 for a hamburger or burrito!
We stopped using StarBucks when we realized that we could take our clients out to lunch for just a little more than having everyone line up and order super-sized frappachised/blended/sprinkled drinks from the Bucks.
Sorry StarBucks. I’ve learned to make a pretty good pot of coffee - for about 1/10 of what you charge for a cup.
April 24th, 2008 at 2:38 pm
Nice post - Great info.
When people can not afford to buy their home due to limited income then other parts of the economy also suffer.
April 24th, 2008 at 6:34 pm
I actually cut out my Starbucks morning routine last fall when I decided to “go greener”. I kept forgetting my metal reusable mug and got fed up with myself and decided that between the cardboard and the extra gas, I could hopefully save a tree a year.
Thanks to you, I just tallied my savings: $1,656 a year!
I added extra for coffee I buy for friends, the occasional lemon pound cake, and some gas… Ok… $1,800 a year!
I actually kind of like the lemon cake..
That is a lot of new domains or renewal fees, or 3 good size trees!