Ready, Fire, Aim! - Mihail's Public Blog: Next for Starbucks? Reach its potential

Tuesday, April 19, 2005

Next for Starbucks? Reach its potential

Sramana Mitra, a good friend, writes about what should be next for Starbucks. I responded that maybe Starbucks should figure out how to be Starbucks again, first. To reach its potential. Whey do I say this? Because Starbucks makes me feel warm and fuzzy whenever I see its green letters and logo. I don't even have to be close enough to read it. Even when I see just a blur of a logo from far away, I feel that emotion immediately.

But I've gone from spending $100-$300 each month at Starbucks across the Bay Area (and the world for that matter), to maybe spending $50-$100 each month. It isn't because I'm trying to cut back on calories -- my blended (only in CA as I found out in Cambridge, MA recently) wet venti cappuccino with Splenda does that quite well.

My problem with Starbucks is that it is becoming increasingly inconsistent. I first noticed it at their franchise non-owned store at the San Jose airport, for example. But over the last six months I've begun to find that inconsistency (and hit-or-miss service) at even locations owned by them. The best Starbucks around is the one on Santa Cruz Ave in Menlo Park. Their coffee is always good. The worst is by Stanford on El Camino Real.

I'm certain that this inconsistency is hitting them hard in same-store sales numbers. More on this when I come across those numbers. Nevermind, thanks to Google here they are in a Seattle Post-Intelligencer story:

Starbucks posted its smallest same-store sales gain in more than three years, reporting a 6 percent increase in March sales for the five weeks ended April 3, compared with a 12 percent rise for the same period last year.

So maybe Starbucks needs to improve the service and consistency of coffee, and make sure that the people who work there stay on as employees and get to know their customers -- then I'll be going back to Starbucks as often as I used to. Otherwise, I'm simply setting myself up for a 150+ calorie disappointment. And I'd rather head to an independent cafe with character that might surprise me with the quality (that is, if there are any left).

Howard Schultz, recently spoke at a leading Silicon Valley company who's board he's on, about community being so important for Starbucks...and how we all strive to connect with others (I believe he gave the example of the yellow Lance Armstrong band). I'd like to see that -- and other parts of their mission -- in action at my local Starbucks so that the "warm and fuzzy" feeling I have for the logo doesn't turn into resentment.

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