Mondo Times Money Poll Archive

This poll ran from July 3 to 13, 2008.

Mondo Stars Poll Results

Is Starbucks coffee overpriced? Yes 2615/95% No 139/5%

Votes: 2754

On July 1, 2008, Starbucks Corp. announced that it would close 600 stores, many of them less than two years old, leaving a network of about 6,600 company-run stores in the US, and more than 4,000 licensed outlets in locations such as airports, bookstores and supermarkets. Worldwide, the company has 15,012 stores in 44 countries.

In the story "Struggling Starbucks' woes could get worse," published on July 2, 2008 at the MSNBC web site, Allison Linn wrote: "Standing in front of industry analysts two years ago, Starbucks executives gleefully proclaimed that the coffee chain's rapid-fire expansion was so successful, it could even support two outlets in one building. Not only that, executives bragged, but the brand was so strong it could be used to sell everything from Scrabble boards to breakfast sandwiches.

"Company executives now freely admit that such thinking is largely to blame for the woes that led to Tuesday’s announcement that Starbucks will close 600 U.S. stores and eliminate thousands of jobs. The coffee giant's missteps have come at a spectacularly bad time, hitting as the economic slump deepens and consumers are seeing their discretionary spending eaten up by rising gas prices and grocery bills.

"If economic woes continue, things could go from bad to worse for Starbucks. Some customers might decide that high-end coffee is no longer an affordable luxury at all, while others might increasingly turn to cheaper alternatives offered by McDonald's and Dunkin' Donuts — companies that have taken aim at troubled Starbucks."

Starbucks was founded in Seattle, Washington in 1971 by three college friends - Zev Siegl, Gordon Bowker and Gerald Baldwin. They had the support of Alfred Peet, who had founded Peet's coffee in Berkeley, California in 1966. Peet was orignally from Holland, where he was a coffee roaster.

Peet taught the Starbucks founders about coffee roasting, and during their first year in business he roasted coffee beans for them. Howard Schulz entered the picture in 1982, when he was a young marketing manager for a Swedish kitchen equipment company. Schulz became a partner at Starbucks, and in 1987 he arranged financing to acquire the company from the founders and became the CEO of Starbucks.

Schulz believed in giving Starbucks customers a unique experience. He thought that the baristas should recognize customer and greet them by name. The baristas should also know each customer's regular order and start preparing it right away. After Schulz arrived, Starbucks employees were trained how to make coffee, and they learned how to remember customer names.

In 1992 Starbucks went public with an initial public offering of 2.1 million shares. The company had 125 stores and 2,000 employees. In 2006, Starbucks had total sales of $6.3 billion and profits of almost $500 million, ranking third among all food services companies behind McDonald's and Yum Brands.

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