Maybe for his company since they charge $5.00 for a coffee, people have slowed there spending habits on the likes of SBUX due to the price of coffee, some people wont want to spend $3-5 bucks on a coffee when they can buy it for $1.00-$1.50 at their local deli. Starbucks Chief Doesn't See U.S. Economy Improving This Year By Josh Fineman and Tim Catts March 19 (Bloomberg) -- Starbucks Corp. Chief Executive Officer Howard Schultz described the U.S. economy as being in a ``tailspin'' and said the company will introduce a new espresso machine with freshly ground beans at most U.S. locations to reverse a decline in customer visits. Starbucks will also start selling energy drinks at its stores, Schultz said today at the its annual meeting. The coffee chain doesn't see the economy, which may be in a recession, improving this year, he said. Schultz, who built the Seattle coffee chain into a corporation with almost 16,000 cafes, is trying to boost sales at existing shops by introducing new styles of coffee and slowing store openings. First-quarter revenue rose 17 percent, the smallest gain in two years, as cash-strapped consumers cut spending and McDonald's Corp. promoted lattes and cappuccinos. Starbucks will ``fight to the death'' to fend off competitors, Schultz said. The chain reported its first quarterly drop in U.S. customer visits last year. After taking over as CEO for the second time on Jan. 7, Schultz, 54, said Starbucks' problems were ``self-induced'' and vowed to introduce more innovative products and clean up aging stores. Starbucks fell 27 cents, or 1.5 percent, to $17.97 at 1:53 p.m. New York time in Nasdaq Stock Market composite trading. The stock is trading near its lowest levels in more than four years.
If they convert a portion of each store into a low-cost trading kiosk, they could take in a ton of rental revenue.
You know, I can't help but feel this just another retail concept that is past its sell by date - McDonalds was the Starbucks of the seventies/eighties and then lost direction as Starbucks have recently admitted to. Starbucks selling energy drinks is like McDonalds selling Pizzas, which it tried for a while. People's tastes move on and some concets get left high and dry.