Daily

green: local; black: non-local;

Starbucks Q4 Profits Down 97%—And It’s All Your Fault

From Guest Editor, Jeremy Greenfield

News today in the so-called industry bible (Ad Age) is that Starbucks didn’t have a great fourth quarter. I’m sure this is a big surprise to babies, old people with dementia, people living in caves, and tens of other Americans. But for most of us, Q3 layoffs of thousands and over 600 store closings (incurring over $100 mill in restructuring costs) was sort of a clue. So, what happened? Hammer time:

Aside from the massive amount of money ‘Bucks had to give its out-going barristas, isn’t it obvious that the chain was going to eat it this fall/winter? A $5 cup of coffee is a luxury. And when you lose your job or your freelance hours are cut back or you stop stealing from your mom because you feel bad enough living in her basement and playing Gears of War and this holiday season you’re finally going to become the good son she thinks you are, you stop buying those expensive cups of free-trade café. Not so fast, superguy.

Think of Starbucks like your drug dealer. If you’re reading this, you probably live in Denver or Boulder, so your dealer is probably a Jewish Rastafarian named Jah Bernstein. He has a Jew-fro, still wears Teva’s and those weird, knit hoodies that went out of style in 1997. Now, imagine he was available all the time and didn’t smell like Nag Champa (you know what I’m talking about). Also, he gives you the good stuff every time for basically the same price. That’s Starbucks. So, yeah, you can’t afford that good stuff anymore because you’re dating a new chica and don’t want her to know how stupid-poor you are, but you buy it anyway, right? Because it’s your drug. It should be the first thing to go when the belt must be tightened, but, really, it’s the last.

But that ain’t how it played out. Howard Schultz and his green army of caffeine pushers still lost big bucks. And this despite the coffee chain’s best post-advertising efforts (see: The Good Sheet). A mystery for sure. But because I want to make sure that the uppity account execs sitting in their cubes thinking of Mad Men fortunes with mad cow brains realize that Starbucks will never, ever, ever need their help advertising, I’m going to fill you in on what really happened:

You decided to switch to the only form of caffeine that your hippie-packed agency allows: Green tea. But no matter how much green tea you drink, you still fall asleep at 3:30, beard doing the Belgian dip in the hummus you left on your desk. Either your green tea is doing it wrong or you need to go back to ‘Bucks. So you do. But, guess what? What you do doesn’t matter to Starbucks because most people aren’t creatives like you; they’re businesspeople or lawyers or they work in a Livestrong bracelet factory; they’re adults and they learned to brew their own coffee when things got rough. End of story. Time for a dopio macchiato.

Jeremy Greenfield is editor of Post Advertising and a contributor to CampaignFreak (AdFreak’s election blog).

55 days ago / / Link

Comment

  1. curious what dunkin donuts sales were like in comparison… double Ds FTW

    — henry · Nov 12, 01:48 PM · #

  2. Throw some ds: http://www.youtube.com/watch?v=nbgg3_0oUe0

    — Jeremy Greenfield · Nov 12, 01:55 PM · #

  3. they’re called bajas.. and they’re coming back.

    — jah_bernstein · Nov 12, 02:22 PM · #

  4. spruce confections FTW

    — justSayinYo · Nov 12, 03:07 PM · #

  5. “those weird, knit hoodies that went out of style in 1997.”

    you mean a drug rug?

    — justin fuller · Nov 12, 03:35 PM · #

  6. This is a perfect example of poor site selection. For years, Starbucks has recklessly opened stores in any location that would have them. I wouldn’t be surprised if the number of store closings doubles or triples in the next year when customers cut back and only one Starbucks can exist per street.

    — Justin · Nov 12, 11:07 PM · #

  7. good riddance

    — cynical sally · Nov 13, 10:42 AM · #

  8. That was not hummus it was baba ghanoush.

    — miguelito · Nov 13, 12:28 PM · #

  9. In their blind drive to put all mom and pop cafes out of business you couldn’t swing a dead cat w/o hitting a starbucks. This is just a market correction.

    — justSayinYo · Nov 13, 01:56 PM · #