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goodbye Starbucks « Previous | |Next »
August 3, 2008

I see that Starbucks, the global American coffee giant, has decided mostly pull out of Australia —it plans to close 61 of its 84 stores. In Melbourne, just five of the 16 stores are tipped to remain. Good riddance--they make really bad coffee: it is weak, poorly made and overly reliant on syrups. Who cares for the comfy chairs, bland music and suburban atmosphere when the coffee tastes like sludge.

Starbucks, maybe an icon of globalization, but it is the downside of globalization in that it failed to adjust to the local culture of European style coffee houses with good coffee. It just dumped what worked in America into Australia. and so failed to adjust to the local Australian culture of European style coffee houses with good coffee. They took the ideas from Italian cafes and implemented them in America. But, as we already had Italian style cafes in Australia, Starbucks offered little in the way of innovation.

Oh, they did have free wireless hotspots (run by Telstra), but that made little difference in Adelaide, which, unlike other capital cities, has a large number of free hotspots in the CBD coffee shops.

| Posted by Gary Sauer-Thompson at 9:14 AM | | Comments (8)


Those that lost their jobs may not agree with you.
The company blamed poor real estate choices which translates to the high rents cant be absorbed by the the business. More will follow. Its jump or get pushed time.

the word on the street, as reported in the media, is that the workers would be snapped by the other coffee cafes because they are skilled and there is a shortage of workers.

Why does your comment "word on the street" make me think of an indian listening to the train tracks?
Theresa train a comin' A big fuckin' train.

I've never had a coffee from Starbucks because I was told it was crap coffee. We've got a couple of local Zarraffas, so why bother with Starbucks?

I don't know about anywhere else, but the people at our local Zarraffas pride themselves on their coffee and getting to know exactly how regular customers like it. I can't see shops like that snapping up staff associated with a chain famous for making crap coffee. McDonaldisation does not translate to the statusphere that is coffee consumption.

Of course the company blamed something else. They could hardly come out and say 'We failed because we make crap coffee and refused to change our ways'. They're also closing stores in the US where property prices are falling through the floor.

the news clip I saw referred to Melbourne--or was it Sydney? Either way there are many more coffee shops in the inner city. I tried Starbucks in Melbourne cos of the free wireless. Yuk.

I think the reasoning of saying that Starbucks went bad because the coffee was bad is flawed. If the coffee was that bad they wouldn't of made enough money to open so many stores.
Businesses go bad for many reasons. This one went because the people at the top made poor expansion decisions and the product didn't raise enough revenue to trade above costs. To their credit though they chose to reposition themselves rather than continue to trade themselves into oblivion. Its a good lesson for others that are feeling the pinch. Its a very public downsizing and a new thing really. Its a good thing I think. It will be interesting to see where they are in 2 years. When the dust settles and the legalities and costs of breaking leases is resolved if it can be new concepts/products will follow. I would think it would be a good decision for them to team with another business like fuel outlets or movies. Lessen the overheads and put yourself in a good zone of people spending money.

if the product didn't raise enough revenue to trade above cost as you say, then there must have something wrong with the product.

No I will have to disagree there. Have you eaten a burger from one of the 2 big t/away joints lately. They are crap but still the business is sound.
Marketing,Money management and People management are the important things. The product only has to be reasonable. Starbucks I thought was consistently reasonable.