var json_comments = new Array("
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Ash78 ain't got time to bleed
February 2, 2009 7:11 PM
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The used market for business jets has dried up. They're going to lose their asses, but at least it'll help keep their image intact!


It used to be that you could order a jet, sit on the contract, then sell the contract to someone else for an extra $5-$10 million (\"impatience premium\"). These jet speculators have been squeezed out, for the most part. In theory, Starbucks could sit on the jet, wait for the market to recover, and get all their money out of it. But JETS ARE EVIL!

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quail
February 3, 2009 4:35 AM
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@Ash78: If selling it creates a loss and charter businesses are down, then why not figure out a tax write off for flying sick kids around with it? Some company in the 90's bragged about their unused space on corporate jets being given over to sick kids and their families. They ran ads ad naseum for awhile, but I can't remember their name. It had to be a tax write off with a little good will marketing thrown in to boot.

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deadspork
March 1, 2009 8:38 PM
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@quail: Liability, maybe? What happens if someone gets hurt or the plane crashes?


It's just a guess, but it seems to be a reason companies don't do a lot of very easy, charitable things anymore (like bakeries giving the unsold items to the homeless, etc).

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APFPilot
February 2, 2009 7:42 PM
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@Ash78: I've still been able to get a premium on some airplanes but it isn't what it used to be

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Brandon Zeman
February 2, 2009 7:36 PM
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@Ash78: They should try leasing the jet- no reason to have it just sit if they can at least get some revenue from it

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Jakuub
February 2, 2009 7:22 PM
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@Ash78: At the same time, at least they're trying to maintain their image, instead of ditching jets/Massive CEO salary after the public outrage. I'm guessing they decided that the $5-10 they could make on the jet will be offset by the free publicity they get out of this (or at least that's how they came to the decision to do this).

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alexcassidy
February 2, 2009 11:49 PM
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@Jakuub: Actually, that's exactly what they did. News about the jet broke in the Starbucks employee community and they went absolutely APESHIT.


There have been the well-publicised store closures and layoffs, and they recently suspended 401k matching as well as reducing the discount in their employee stock purchase plan. Also, they are requiring all stores to run 3% below on their labor hours. (Keep in mind the company is still profitable, just not as much as they'd like to be)


They did all this, and THEN they took delivery of the jet. So it was definitely in response to public outrage, it just wasn't the general public.


[starbucksgossip.typepad.com]
If you've got the time, this should give you a taste of how people reacted

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Ash78 ain't got time to bleed
February 2, 2009 7:27 PM
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@Jakuub: Right. Nobody should fail to realize it's a business decision, whether it really makes sense or not (chances are they'll still use a fractional ownership plan -- aka \"jet timeshare\" -- which often costs more money, but is off the balance sheet).


I once worked on an acquisition of a bank who had a Hummer H2 with their name screenprinted all over it. They parked it at local events for publicity. Until one day, the media decided that Hummers were evil and the bank (wisely) sold it at a pretty hefty loss and spent more money on another vehicle.

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downwithmonstercable
February 2, 2009 7:13 PM
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@Ash78: On the other hand, if you want a used jet, you have a huge surplus to choose from now that jets are suddenly unfashionable.

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AlteredBeast
February 2, 2009 7:29 PM
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@downwithmonstercable: You could drive your used Hummer to catch a flight on your used private jet! :P

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ALaterDayTD
February 2, 2009 7:11 PM
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Thats too bad... Some people won't be able to walk out of a starbucks, forget they just went, and walk into the one right across the street anymore..

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4 replies
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nullrout
February 2, 2009 7:17 PM
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@ALaterDayTD:
You know you say that, but where the stores are that close its for a reason. The reason being THEY MAKE MONEY! Most of the stores that were closed were not in major metropolitan areas.

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Etoiles
February 2, 2009 7:39 PM
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@nullrout: Indeed. You can be someplace like Union Square, in Manhattan, with 8 or 9 Starbucks within a 2 block radius, and still the line will be 5-15 people deep at the counter of each and every one.

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joel.
February 2, 2009 9:58 PM
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@Etoiles: Right. And they build more to maintain their customer service - short wait times equal happier customers. At least that was the strategy before all this economic trouble.

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chipslave
February 2, 2009 7:14 PM
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@ALaterDayTD: No joke there... Who thought that a Sbux on every corner was a good idea anyway? lol

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mariospants
February 2, 2009 7:14 PM
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You see? You mess with the time-honored logo and this is what you get: you go start going tits up.


------


on a serious note (does Consumerist disemvowel or is that only Gawker sites?) when I talk to Starbucks baristas here in Ottawa business seems to be fine.

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TheGuinnessTooth
February 3, 2009 3:50 PM
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@mariospants: You live in Ottawa and go to Starbucks instead of Bridgehead? What a wasted oppurtunity. Everytime I go to Ottawa I make sure to bring back a pound or two of their ground espresso. I wish they'd open a shop or two in southern New England, ideally New Haven.

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ADismalScience
February 2, 2009 7:39 PM
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@mariospants:


Sadly, that IS their original logo. They're becoming what they were when they last used it: a tiny Seattle-based coffee chain.

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quail
February 3, 2009 4:39 AM
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@ADismalScience: Didn't the original logo have full boobage showing? Seem to remember that from the first time I took a sip in my southern town and went WTF? I could care less but I knew the Baptists in town would take it as a sign of the anti-christ.

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dragonfire81
February 3, 2009 5:35 AM
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@quail: Hello to a fellow Ottawan! Although I don't live there anymore, I was born there and I have spent a lot of years there. I went to a Starbucks from time to time but usually couldn't afford it. I was more likely to be found in a Bridgehead coffee shop.

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Pink Puppet
February 2, 2009 7:27 PM
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@mariospants: I'm fairly sure I've seen disemboweling since Consumer Reports bought out Consumerist.

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Trai_Dep
February 2, 2009 8:40 PM
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@Pink Puppet: Hey, so long as they YouTubed it, I'd be all for it.
Second offense: Drawn & Quartered.
Third offense: being rolled in Perfect Oatmeal, staked to an office chair then slowly nom nom nom'ed to death by Captain Duvel Moneycat!

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Pink Puppet
February 4, 2009 2:07 AM
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@Trai_Dep: Good G*d, sir, you really are as sinister as your reputation suggests!

I like it.

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Tmoney02
February 2, 2009 7:42 PM
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@Pink Puppet: I think so as well. As far as I know this commenting system is still tied into gawkers commenting system. I say this because when you look at a person's profile it still shows comments made on other gawker sites.

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mariospants
February 2, 2009 7:15 PM
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@mariospants: And by \"talk to Starbucks baristas\" I mean \"chat up the pretty ones\".

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downwithmonstercable
February 2, 2009 7:18 PM
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@mariospants: LOL.


All the baristas/baristos (?) I talk to say business hasn't slowed. But I live in a suburban/urban area with considerable soccer mom populations. I'm guessing there are underperforming stores here and there that aren't making the cut or aren't making enough profit for them to weather a downturn.

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Brie
February 2, 2009 7:49 PM
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@downwithmonstercable: I'm a loner mom in soccer mom country and I patronize Starbucks maybe twice a month. Always prefer the quieter Starbucks that don't have lines fifteen deep AND crowds in the wait-for-your-drink area. The non-drive-thru Starbucks always seem calmer, too. But too bad for me because oases of quiet don't bring in revenue like caffeine-milk-and-sugar-starved throngs. Does Starbucks have a name for people who come in two or three times a day?

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downwithmonstercable
February 2, 2009 9:22 PM
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@MissedTheExit: I hear you. I'm the stop in once in a while type of guy and I prefer the sligthly further out stores. Unfortunately being in the area I'm in, that could mean a 20-30 minute drive.


All things considered, I can't complain though. I hope things turn around for Starbucks. I'm not a coffee snob, I think their coffee tastes fine, and they provide a nice atmosphere as long as there aren't like five thousands other people in there.

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PunchesSmallAnimals_GitEmSteveDave
February 2, 2009 7:15 PM
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NetJets.com just got another customer!

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u1itn0w2day
February 2, 2009 7:18 PM
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I'm not surprised nor should guys like Schultz really be .At least he's willing to take a pay cut and set an example .


Starbucks grew too fast and charged too much to sustain their business on the scale which they are doing now .If another close by Starbucks isn't taking your sale the cheaper McDonalds down the street is .


But with all these businesses,I don't see how prices got as high as they did .What was it-the I phone had to be cut in half .When the tech heads aren't buying high priced gadgets you know the party's over .


I guess those same tech heads aren't buying internet time at Starbucks either .

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floraposte
February 2, 2009 8:13 PM
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@u1itn0w2day: I'm not sure that the inability to sustain a business at boom levels during a recession is really proof that they grew \"too fast,\" though. I'm not convinced that the ideal business model is one that stays the same size regardless of the market. After all, if they made more money from recent expansions than they lost when sales began to decline and when they unload the assets, it was still worth the expansion.

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u1itn0w2day
February 2, 2009 8:25 PM
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@floraposte: I'm not saying stay the same size but when you have to close almost a thousand stores in less than a year I think there was some over building there .


On one hand it helped them capitalize on a fad or trend but fads and trends only last so long .I guess the question is will the shrinkage be faster or more than the expansion .Hopefully the closing stores at least payed for themselves .


But to me it still comes down to price ,especially for really regular customers .The cost has to catch up to them over time .

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downwithmonstercable
February 2, 2009 9:23 PM
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@u1itn0w2day: I've been hearing McDonald's is having a big impact as people try to cut costs but don't want to cut their morning coffee. Starbucks had the benefit of a boom economy when expanding, and now that proverbial poop has hit the fan, they're losing the legs they're standing on.

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downwithmonstercable
February 2, 2009 7:23 PM
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@u1itn0w2day: I remember reading a few years back that starbucks still wasn't happy with the number of stores they had. I don't remember the exact number they had at that time, I think it was something like 8,000 stores in the US. They wanted to have 30,000 total in the next ten years. I thought that seemed a bit outrageous. Turns out it was unfortunately.

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lockdog
February 2, 2009 7:22 PM
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Got to hand it to the guy for taking 80%ish pay cut. I'd like to see every bank, financial firm or automaker taking bailout money to do the same with all of their top executives.

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edosan
February 4, 2009 5:10 PM
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@lockdog: I know it's a largely symbolic gesture, but I wish more CEOs would be willing to cut their own salary before they kick people out on the street.

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katieoh
February 3, 2009 4:53 PM
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@lockdog: given, with perks and stuff, the article said it was something like 9mil a year, but the actual pay cut was a really, really nice move. it makes me want to go to starbucks to support a company that is apparently taking logical steps to remain afloat... no \"Starbucks Field\" or any other such bull.

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sarahq
February 3, 2009 12:41 AM
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@lockdog: I thought that decent of him as well. Might not have any significant effect on their books, but it's certainly the respectable thing to do in terms of morale.

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Blueskylaw
February 2, 2009 7:55 PM
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@skizsrodt:

Don't forget the henhouse,

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coren
February 2, 2009 7:38 PM
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@lockdog: Actually it's about a 99 percent paycut if his salary was 1.2 million. 1 percent of that is about 12 grand.

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lockdog
February 2, 2009 7:47 PM
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@coren: Yep...I knew that seemed too low, I should have double checked it. And know we know why I am (at heart) a carpenter. I can rock the fractional math, but decimals and percentages really screw with me.

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lockdog
February 2, 2009 7:49 PM
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@lockdog: Also, I can't type. Make that, \"And now we know...\" I think I'll go hang my head in shame somewhere now.

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your new nemesis
February 2, 2009 7:28 PM
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@lockdog: Seems like the honorable thing to do, if your corporation is tanking, you shouldn't be expecting to make as much. I am also impressed with the effort to not leave the employees high and dry by offering severence and placement in other stores. Definitely more ethical than other business' you hear about on this site. I think I may go get a cappucino later.

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sburnap42
February 2, 2009 9:53 PM
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@skizsrodt: Clearly, there's no honor in the banking industry.

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thezone
February 2, 2009 7:27 PM
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@lockdog: I also have to give Schultz a big thumbs up by cutting his salary to 10k. How many CEOs would be willing to do that? I wish more CEOs would lower their salary and get rid of executive bonuses before laying off employees.

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Collie
February 2, 2009 8:57 PM
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@thezone: Just remember the salary of CEO's is a minor part of their compensation, it did not say he was giving up his stock options, and other compensations.

I think it is a good PR move especially to the 6000 poor schleps who just got the axe to their noggins.

Not to mention their are going to be a lot of empty coffee shops across the fruited plain now. What do you do with all the empty retail buildings in the meantime? Can you convert them to housing for the soon to be foreclosed.

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your new nemesis
February 2, 2009 7:22 PM
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So, I won't have a starbucks in every mall/department store/bookstore/lumberyard/junkyard/bathroom/furniture store to choose from? I guess this means I won't have to worry a out my car being towed away.

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Anonymous
February 2, 2009 7:23 PM
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Does this mean that Starbucks won't be opening any more locations directly across the street from each other? I hate crossing streets.

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u1itn0w2day
February 2, 2009 7:33 PM
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Are Starbucks problems as much about a fad or trend running it's course along with price ?


I think a saw a number of about 16,000 stores .Even if they're only 10,000 in the US that's about 200 per Starbucks per state .But how many major metropolitan areas in a state can support a Starbucks at their prices .

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Colage
February 2, 2009 11:34 PM
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@u1itn0w2day: No. I think that Starbucks has been ubiquitous for long enough that it can't really rightly be called a fad or a trend anymore. Nor is their pricing scheme uncommon; a 20 oz. coffee in my immediate area is $1.90 from Starbucks, $2.05 from McDonald's, and $1.75 from 7-Eleven. Espresso drinks are obviously more expensive, but not out of line with what you would get at another chain store or independent coffee shop.

What's happening is more likely a function of discretionary spending being reined in by people because, or for fear of, job loss. When things are going well you can buy luxury items like espresso drinks and pastries, but once the squeeze gets put on, it's back to oatmeal and drip coffee from the house.

The short answer is that Starbucks isn't experiencing anything different than any other company is now. People are spending less, which means that it needs to tighten its own belt. Starbucks just needs to tighten a little extra since the nature of its product makes it more vulnerable to a bad economy.

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u1itn0w2day
February 3, 2009 5:51 AM
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@Colage: I agree to a point .But Starbucks I think had announced 600 closings last summer before the Wall Street meltdown .


And even though I don't fully agree with the process Starbucks was on the list of AMEX's danger store credit card blacklist .Point being if the credit card companies are seeing a pattern of pay problems with people who spend at Starbucks with credit cards that tells me Starbucks has been overpriced .


The overall economy is a big problem but Starbucks's problems started before the current economy .

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Colage
February 3, 2009 7:48 PM
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@u1itn0w2day: The recession started in December of 2007, which would put store closings in Summer 2008 to be pretty reasonable. The fact that they closed stores before Lehman Brothers went down isn't really significant unless you're drawing a timeline.

Further, I don't see how AMEX's blacklist figures into any of this; I think you're taking data that says that people who use their AMEX there are disproportionately likely to miss a payment and assuming that data is saying something about the company and not the consumer.

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ceilingFANBOY
February 2, 2009 7:35 PM
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Maybe now Dire Straits will be able to afford their own jet airplane.

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goodcow
February 2, 2009 7:37 PM
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I'm glad they aren't willing to destroy their core values like gutting health-care and stock options.

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alexcassidy
February 2, 2009 11:52 PM
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@goodcow: Yes, I give them props for that as well. As long as you overlook the fact that their stock might as well be toilet paper and they've cut health care by making it so almost nobody gets enough hours for it.

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savdavid
February 2, 2009 7:40 PM
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Oh, the poor dears! Having to give up their private jet! What a tragedy!!

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coren
February 2, 2009 7:40 PM
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Good on him, taking a 99.1 percent paycut.

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1 replies
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Holly Grimmett
February 3, 2009 3:40 PM
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@coren: Heck yeah. More CEOs should follow his example.

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RazFandango
February 2, 2009 7:41 PM
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Easy solution -- don't charge so freaking much for coffee.

Hard part about easy solution -- maintaining quality.

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Blueskylaw
February 2, 2009 7:41 PM
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Dear Partners,

When profits are up you don't get to share in it and I buy a jet for myself, when profits are down you get laid off.

Sincerely,

Your Boss, HS

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Corporate_guy
February 2, 2009 7:43 PM
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\"reported negative comparable store sales as high as 30%\"
Does that mean the stores lost money? Or just aren't making enough profit? It would be messed up to close all those stores just because the profits they make aren't enough. Profit is profit.

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Oranges w/ Cheese hates what Christmas has become
February 2, 2009 8:36 PM
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@Corporate_guy: He said their stores saw an average 9% decline, while other retailers have seen as much as a 30% decline.
He means they aren't doing as horribly as other stores.

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Christopher Carey
February 2, 2009 7:47 PM
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Its only a matter of time before they are asking for TARP funds.

I can see the argument now. Give us the money or we spike your Latte.

Seriously if only 100 people go to each store, thats like 30000 less super hyper caffeine addicts roaming the streets looking for their fix. Maybe those soccer moms can save some fuel stay home and speed complain at home now.

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Pop Socket
February 2, 2009 7:56 PM
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I bet the jet tastes burnt.

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jpdanzig
February 2, 2009 8:13 PM
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Partnering is such sweet sorrow...

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wee0x1B
February 2, 2009 8:29 PM
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They really ought to try selling good-tasting coffee at a reasonable price. The stuff they sell is absolutely foul.

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1 replies
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Rey
February 3, 2009 4:51 PM
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@wee0x1B: Blah blah burnt blah blah foolishness.

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Kishi
February 2, 2009 8:34 PM
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Well, since there are four Starbucks within one mile of each other by where my wife works- one in a mall, one in a Barnes and Noble, and two free-standing- I can't help but think they've over-saturated the market a bit.

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Whyspir
February 2, 2009 9:05 PM
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@Kishi:


Friend of mine down in Washington saw four coffee shops all across the street from each other in an intersection...


3 were Starbucks.

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Colage
February 2, 2009 11:42 PM
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@Whyspir: Geographic proximity doesn't always mean over-saturation. I'm not sure which Washington you're referring to, but Starbucks can (and does) have busy shops across from each other at DC Metro exits. And if there's a 4th coffee shop on the corner, then it's probably not Starbucks being exuberant.

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Oranges w/ Cheese hates what Christmas has become
February 2, 2009 8:35 PM
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Our revenues were down 6% from a year ago, driven primarily by a 9% decline in same-store sales. Retailers across the country have reported negative comparable store sales as high as 30%, in the midst of declining consumer confidence to levels not seen in 40 years

No.. I think its more people wising up to the fact that a $4 cup of burnt coffee isn't any better than the $.50 burnt coffee they can make themselves.

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jusooho
February 2, 2009 9:53 PM
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@Oranges w/ Cheese: I occasionally meet clients at a local starbucks and never saw a 4 dollar burnt coffee. To get that price you must get one of those obscene ice-cream-whipped-cream monster drinks, which look foul anyway.


A large coffee is $2.15 at my starbucks. Very cheap when you consider the cost of renting meeting space at the local La Quinta or other alternatives.

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Etoiles
February 2, 2009 8:46 PM
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@Oranges w/ Cheese: I hate to be Ms. Starbucks Apologist here, because frankly Dunkin's is my favorite coffee and has been since I was 17 (I grew up in Massachusetts, they're like three to a block up there in the home turf), but at Starbucks their actual cups of coffee -- just coffee -- are in the same $1.50 - $2.50 range that most places sell coffee for. It's the lattes and blended drinks and such that are $4 - $6, and those are made with espresso anyway.

Just tired of the same wrong argument.

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Jim Topoleski
February 2, 2009 8:57 PM
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@Etoiles: maybe by you its the same, here in the Tri State (NYNJCT) area, a X large Dunkin Donuts is 2.15-2.25 depending on area. A Venti Coffee (which is smaller than a xlarge) is just shy of 3 dollars.

Even Dunkin Donuts lattes are cheaper, and they actually taste decent as opposed to Starbucks whos espresso is almost as over-roasted as their coffee.

And they both use automated machines so its not like your paying for the experience of the barista... many wouldnt know what a real expresso machine LOOKS like if you showed them one.

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snowburnt
February 2, 2009 8:44 PM
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Maybe they can sell their jet to Citi...

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Plates
February 2, 2009 8:48 PM
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What do you do when the Starbucks down the street closes?
Go to the one across the street.

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Quake 'n' Shake
February 2, 2009 8:48 PM
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I rarely hit the Starbucks near my home anymore. The past few months, it's seems to always have a long line, and then when I get to the counter, they don't have any bold roast coffee made. I dislike the Pike's Place roast. With 2 independant coffee shops a literal stone's throw away from the nearest Starbucks to me, why bother anymore?
Oh, and there's 1 other independant coffee shop even closer to my house, that's in the opposite direction of Starbucks. Frankly, Starbucks is now my 5th choice.

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Anonymous
February 3, 2009 5:45 AM
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@Quake 'n' Shake: That is almost science fictional that you have 5 chioces before a s%#@&*%ks.If i could find a nice mom & pop coffee shop i would be there for a shot.i just go for the free newspaper and the 53CENT refills.ah yes the magical 53 cents refill.

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vastrightwing
February 2, 2009 9:56 PM
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and what about Juan Valdez? What's going to happen to him now?

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Quake 'n' Shake
February 2, 2009 11:39 PM
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@vastrightwing: He'll just transport cocaine, like the rest of the villagers.

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RazFandango
February 2, 2009 11:13 PM
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The easiest way they could recover is if they'd stop charging $3.50+ for their coffee.

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geoffhazel
February 3, 2009 2:13 AM
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This seems like a bad time to be in business aircraft sales. Everyone is getting dumped on for owning or using a corporate jet.

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Brazell
February 3, 2009 3:00 AM
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Well, I love my local Starbucks, so hopefully it doesn't close.

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springboks
February 3, 2009 2:21 PM
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Are 300 Walgreens going to open instead? In this economy who needs coffee. Gimmie Vicodin!

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P_Smith
February 3, 2009 3:32 PM
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Does this mean they are also going to sell those new coffee making machines that were supposed to save time?

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darkryd
February 3, 2009 3:46 PM
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I respect the fact that the guy is taking a massive pay cut, however its a little shady that he took a trip to Hawaii on the jet right after it was bought.

I doubt it was just a \"business\" trip that happened to fall right after the jet was purchased.

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baristabrawl
February 3, 2009 6:50 PM
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Honestly, it has nothing to do with business. They closed the store I worked at in Indianapolis and it's on a major thoroughfare on the way into downtown. It almost seems like class warfare, because the majority of the stores here are in \"not so good\" parts of town. Sad.

Now, I went out and found a job making twice as much as I was at Starbucks, but I did like the job. It's sad, I'm glad I work in Healthcare and that is what my degree is for. Hopefully it won't go belly-up, too. :-(

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Jennifer Barajas
February 7, 2009 4:06 PM
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It's terrible that Howard has to cut not only hundreds of jobs, but also about 90% of his income. I know he's worked hard to help build such a great company thats gone global. It's a huge sacrifice and I hope it all gets better.
I work for the Starbucks in my neighborhood and I can definitely say that it is the best job ever. I was devistated when they told me we had to cut hours and layoff a few more people because we have such a great crew. For all the partners out there, please make sure that you are on top of your game at work. Performance is everything. We need to do something to help. Good luck and God bless.

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