Starbucks chairman warns executives of damage to brand

[Zeus]

Starbucks chairman warns executives of damage to brand

[SIZE=2]LOS ANGELES (Reuters) - Starbucks Corp Chairman Howard Schultz told executives in a memo last week that measures taken to fuel the coffee shop chain's rapid expansion had led to a "watering down" of its iconic brand.[/SIZE]
[SIZE=2]Schultz, Starbucks' founder, wrote on February 14 that automatic espresso machines, bagged coffee and "cookie-cutter" store designs had led to a sterility at the chain that had invited competition from fast-food companies and others.[/SIZE]
[SIZE=2]The memo, posted on the Web site http://www.starbucksgossip.com, was first reported on by the Wall Street Journal on Friday. Starbucks spokeswoman Valerie O'Neil confirmed the authenticity of the memo to Reuters.[/SIZE]
[SIZE=2]"In order to achieve the growth, development and scale necessary to go from less than 1,000 stores to 13,000 stores and beyond, we have had to make a series of decisions that, in retrospect, have (led) to the watering down of the Starbucks experience, and, what some might call the commoditization of our brand," Schultz wrote in the memo.[/SIZE]
[SIZE=2]In the memo, which was sent to Chief Executive Jim Donald and other members of senior management, Schultz said he took "full responsibility" for past decisions.[/SIZE]
[SIZE=2]"We desperately need to look into the mirror and realize it's time to get back to the core and make the changes necessary to evoke the heritage, the tradition, and the passion that we all have for the true Starbucks experience," he said. [/SIZE]
[SIZE=2]Romance has gone [/SIZE]
[SIZE=2]As examples, Schultz said automatic espresso machines had made service faster, but had removed "much of the romance and theater that was in play" with traditional espresso makers, which required baristas to pull each espresso shot themselves.[/SIZE]
[SIZE=2]Streamlined store designs, which "satisfy the financial side of our business," meant stores "no longer have the soul of the past ... some people even call our stores sterile, cookie cutter," he said.[/SIZE]
[SIZE=2]O'Neil said she was not aware of any specific changes that would be made to the business, adding that the memo was part of a long-standing commitment by Schultz for Starbucks to remain true to its roots.[/SIZE]
[SIZE=2]"It is not a one-off," O'Neil said. "Some people are thinking that this is a sign of something. No, this is just something that (Schultz) does."[/SIZE]
[SIZE=2]In the last decade, Starbucks has grown from 1,100 stores to more than 13,100 -- and the company's rate of expansion keeps increasing. It plans to open 2,400 stores this year.[/SIZE]
[SIZE=2]At the same time, however, sales increases at Starbucks stores open at least 13 months have slowed.[/SIZE]
[SIZE=2]Same-store sales rose 7 percent in fiscal 2006, compared with a rise of 8 percent in 2005 and 10 percent in 2004.[/SIZE]
[SIZE=2]In the United States, the company has faced stiff competition in the past two years as restaurant chains like McDonald's Corp., Dunkin' Donuts and Burger King Holdings Inc. have upgraded their coffee offerings.[/SIZE]
[SIZE=2]In the past, Starbucks has said it sees those moves as positive for its business because they help to increase consumer awareness and demand for specialty coffee.[/SIZE]
[SIZE=2]But in last week's memo, Schultz said Starbucks' "current state of affairs" had allowed competitors "to position themselves in a way that creates awareness, trial and loyalty of people who previously have been Starbucks customers. This must be eradicated."[/SIZE]

[mikmik316]

Ang problema sa Starbucks sa Pinas ang mahal na masyado... Imagine a Frap you can order at 110-120 max for Venti before 160-180 na ngayon... tsk tsk...

I am just wondering kung nagmamahal ba ang coffee beans, gatas at syrup o kung mahal na ang rent sa space or mataas na sweldo ng mga barista? definitely their higher prices created an opportunity for other brands to get the 80-120 peso budget of a regular coffee drinker...

[oldblue]

nadadamihan pa din ako sa small, nakakataba

[GasJunkie]

just drink half???

[Lucius]

Problem is... madaming feeling soci pag nasa Starbucks. What's the big deal of drinking coffee there. We all have been there, but I didn't feel anything special at all. There's nothing fancy. It's just a coffee shop dammit! Usual suspects are of course, girls. No offense but I feel sick when I see these types around.

Yup, super mahal pa. Dati ung Vanilla Cream Grande 105 lang now 120+ na yata or something. Dapat dominated ng couches, hindi ung wooden chairs that hurts after an hour lalo na if naka-laptop ka or kwentuhan with friends.

[usokpower]

Problem is... madaming feeling soci pag nasa Starbucks. What's the big deal of drinking coffee there. We all have been there, but I didn't feel anything special at all. There's nothing fancy. It's just a coffee shop dammit! Usual suspects are of course, girls. No offense but I feel sick when I see these types around.

Yup, super mahal pa. Dati ung Vanilla Cream Grande 105 lang now 120+ na yata or something. Dapat dominated ng couches, hindi ung wooden chairs that hurts after an hour lalo na if naka-laptop ka or kwentuhan with friends.

I agree with you all the way. This only proves that our society has been plagued or has been delusioned with a vice called, "kayabangan". I often hear people complain and whine and blurt the words "mahirap ang buhay" countless of times. But this same people have the spare money to go to starbucks frequently to buy a 100 peso worth of coffee but could ill afford to pay for a 70 peso worth of lunch meal.

As for your second paragraph. It think the law of supply and demand comes into play. As for the wooden chairs, I think it is part of their tactic to increase their rate of turnover

[BlueBimmer]

tsktsk...P100++ for coffee...thats why i avoid such places..unless dun talaga punta ng tropa..

frikkin waste of money

[Gumusut_Amige]

hindi na ako uulit... minsan naglambing pamangkin ni esmi sa starbucks daw, i shell out 700++ petot sa kape lang + choco cake! problema pa naman nerbiyoso ako pag nagkape

[GerardTagayty]

kaya saken na lang kayo bumili ng pang brew na cooffee! lol

kidding aside dito lang naman satin status symbol ang starbucks...the only thing i like about them e yun variety... not like f****o ahehehe kahit local ang pinanggagalingan ng kape nila. feeling ko strat talaga ng starbucks yun mga hard wooden chairs.. lol para d ka magtagal and thay can get more people inside. more costumers... lol

[Lucius]

Haha what about the branch in Rockwell? Sa labas may mga rattan chairs hahahahaha mas masakit un =) Is anyone here a member of friendster? You should frequently check out your friends' photos baka mamaya may picture sila either with the Starbucks panaflex, or their coffee/plastic cup. Or sometimes just the coffee/plastic cup alone. WOW! Feeling kasi nila mostly sosyal na daw un maka-Starbucks lang hahahahaha. Dami dami nagcocoffee sa Starbucks pero walang auto. Commute lang, jeep/bus/lrt-mrt. Galing noh? Pasikat lang daw =)