Why Starbucks is going down, credit crunch or no credit crunch

In the Evening Standard yesterday, we were told that tens of thousands of jobs were likely to be lost in the UK in the very near future, the biggest single number of which were in retail. What with Woolworths on the rocks (the place having had no niche of its own for years, everyone else being better at them in clothes, stationery, sweets, records, pretty much everything in fact) and a number of other retail chains having gone into liquidation recently (notably the Dolcis shoe shop chain). Apparently, chains of cafés selling expensive fancy coffee are apparently in the front line as well. We have heard that Starbucks have closed 600 stores in the USA and have pulled out of Australia altogether. I suspect, however, that Starbucks may be on the way down anyway, for two reasons.

The first is simply that it mushroomed a few years ago, and is now in the process of getting rid of some of its deadheads. A typical example is here in Kingston, where they opened their first café on the one-way system opposite Wilkinson’s around 2000. They later opened up three others, one in the Borders shop in the marketplace, one in the entrance to the Bentalls shopping mall, the other round the corner from the original, but in a much better location, being easily visible to people approaching the town from the railway station and Eden Street, which is full of bus stops. Nobody would go all the way round to the “race track” when they can go to that last one, so it had to go.

The second, however, is that their coffee is rubbish. For all they boast about their special blends of Ethiopian and South American coffee, they might as well not use coffee beans at all and make do with coffee colour, and provide you with a cup of hot milk to which you can add sugar and spices to taste, because the last few times I have had their coffee (I always have latte), that’s what it has tasted like. It hardly even smells like coffee. No, that’s not because it’s latte, because most other coffee vendors do caffe latte which tastes and smells like coffee. It’s because Starbucks is using poor quality beans, or beans which have sat around for hours and lost their flavour, or some other reason. They are not the only vendor which has been selling tasteless coffee - the Puccino’s “Deli Bar” in New Malden has sold me two tasteless lattes recently, both for £2.15 (Starbucks is £2.05) - but the taste of Starbucks’ coffee is because of something they, or their suppliers, are doing wrong.

To be fair, the reasons why coffee from these big chains is expensive has a lot to do with high-street rents - they can’t have much to do with paying high wages or using high-class coffee beans after all. Milk may have gone up lately, but a pint of milk only costs around 50p. When people have less money to spend and rents start going down, the price of a coffee might go down soon as well. However, recession or no recession, £2 or more is too much to pay for sweet, warm milk, which is something we can all make for ourselves at home.

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