This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

In 2013 Starbucks Is America

NEW YORK ( TheStreet) -- On vacation in England recently, I avoided Starbucks (SBUX - Get Report), while the people I was visiting just as eagerly longed for it.

We were motivated by the same call, America.

Living here you can sometimes forget how big a deal this country is to the rest of the world, and how symbolic it remains of the good life. That's what Starbucks sells outside the United States -- not coffee, but a few minutes in America. Where the couches are comfortable and the WiFi is free.

This is especially true in markets like China, where the company will soon open its 1,000th store. As a local blog called The Beijinger put it, "Starbucks in China has never been about coffee." It's about creating a middle ground, an illusion of freedom to speak and equality of rank, in a country where that's very rare.

In a way, Starbucks today occupies the position Coca-Cola (KO - Get Report) did right after World War II. It's a symbol of America's best qualities and its relative safety. A Coke was uniformity in a bottle, a refreshing drink that wouldn't kill you. Starbucks is a place where you can feel safe, equal and free.

Both are illusions, but American business thrives on illusions. Movies are illusions, advertisements are illusions. Illusions have immense power in places where reality feels dismal.

This gives Starbucks tremendous room to grow, with expanding margins, because price is not the issue. The company now brings about 10 cents on every dollar to the net income line, after taxes, and unlike some other companies its tax bill is rather hefty, about 32%.

Which brings up another point about Starbucks. The image it projects is the more benign, liberal face of America. Its request that customers leave their guns at home is a signal to international markets that don't understand America's current gun addiction, a sign Starbucks doesn't either.

CEO Howard Schultz also cultivates an image that reminds me of the legendary Coca-Cola CEO Robert Woodruff. He gives lip service to environmental causes and his endorsements to President Obama and ObamaCare. But he's also a deficit scourge, having supported an anti-gridlock group called "No Labels" back in 2011.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
MCD $98.99 0.00%
KO $41.21 0.00%
SBUX $51.48 0.00%
AAPL $132.54 0.00%
FB $80.54 0.00%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs