With Starbucks stock plummeting – it lost half its value in the past 15 months – C.E.O. Howard Schultz spent yesterday reassuring thousands of anxious shareholders that everything would soon be right as rain, once some new changes “restore an authentic coffeehouse experience to the company’s stores,” as the Times puts it. It’s fun to watch corporations trying to “restore” authenticity, like when elderly bluebloods try dressing “casually” in their creased blue jeans.
The behemoth has to fight a battle on two fronts, because they’re simultaneously losing budget-conscious customers in markets hit hardest by the subprime mortgage crisis, while also losing more affluent customers to the high-quality espresso trend that's caught on in some regions. Since returning as C.E.O. three months ago, Schultz has announced 600 layoffs and closed 100 of the least profitable stores in the U.S. Meanwhile, Starbucks' music endeavors – which started so auspiciously in '94 with an album by Kenny G – are faltering.
Yesterday Schultz officially announced the acquisition of the company that makes the Clover coffee brewing machine, which Starbucks’ up-market competitors have been using to great effect, like Williamsburg’s El Beit. Starbucks will be trying out the Clover in “select markets” this year. Other changes to stop the hemorrhaging include:
- A cool new online community, MyStarbucksIdea.com, which features a corporate weblog, or “blog.” Customers can also make suggestions and chat with real Starbucks employees!
- Baristas will now refresh the coffee in urns every 30 minutes. (It currently sits there for up to two hours.)
- A new blend called Pike Place Roast, named for the location of the first Starbucks store.
- A partnership with Conservation International to certify environmentally sustainable whole bean espresso products.
- Each Starbucks restroom will feature another Starbucks conveniently located by the toilet.
Photo of Howard Schultz: sillygwailo
