Here's how it started.
I began Friday by pointing out that the business media had, in reporting Starbucks'
, essentially neglected to set them beside the comparative strength of two other coffee company earnings:
Peet's Coffee and Tea
Green Mountain Coffee Roasters
, who both reported late last week too. (
reports after the close this Wednesday so stay tuned.)
Drawing immediate comparisons between coffee purveyors, however imperfect, could work toward solving a central mystery. Has Howard Schultz, Starbucks' returning CEO, been telling the truth all these months when he tells anyone who will listen that Starbucks can return to form by getting back to basics? On the one level, the fact that other coffee companies showed relative strength supported this claim. Toward this end, if Starbucks tweaked this or that, they could in effect catch up with the better performing competition.
They Still Don't Get Starbucks!
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Looking at it a different way, though, you could say that though Starbucks long operated without competition, it is becoming clear that others are taking business from them and a return to basics holds no salvation because others are already there, beating them, as appeared possible, on the basics.
The business media probably took a pass on making an immediate comparison -- and The Business Press Maven did no better -- because it is not an easy question to answer.
That is where over four dozen readers and viewers (crayon writers not included, you little devils) weighed in with passionate thoughts, sometimes delivered in pithy notes, some in near tomes. (Please know that though I get a lot of mail, I value it greatly and will always answer...eventually.)
Maven-reader consensus seems to lean toward the concept of last week's earnings comparison defining Starbucks as the new
. In other words: a company that had a good basic business before turning overgrown. Others caught on and offered the same basics. Even as the overgrown giant promised to catch their groove again by returning to basics, they were too unwieldy and, besides, others were now there, right where they used to be.
J.B. Hoover started by accusing me of over analyzing, ignoring that fact that I was, in fact, failing to analyze by turning it over to readers. But I'll forgive anyone with the courage to tilt against the coffee innovator while living in "Starbucks Central" as he calls his home of Seattle, Wash. To Hoover's eye, it's the taste, dummy. "Anybody with a discriminating palate will tell you this," he wrote, echoing a surprisingly large number of letter writers many of whom, like Ken Oakes, complained about the stronger taste of Starbucks: "how about a choice between a coffee so bitter you have to buy an overpriced cookie to help get it down or just a nice mellow cup you can enjoy without worrying about it eating the enamel off your dentures?" At least Ken doesn't have to worry about cavities from the cookies.
Schultz, of course, made taste an issue in a recent round of publicity that involved closing the stores to give baristas a primer on how to brew better coffee. The company has also reintroduced Pike Peak, a decidedly mellow blend and even showcased it with a free giveaway, if via a poorly written promotional card that I had a good honk and snort over with a couple of readers. Here was the card which had you wondering whether you were allowed a free coffee each Wednesday or only one solitary free cup, after bringing the card in over all those Wednesdays: "Bring this card into your neighborhood Starbucks every Wednesday now through May 28 and receive one tall cup of Pike Place Roast on us."
Mike from Florida, in referring my kitchen table videos, said that I needed to get out more, both for my own health and to do research on how simple the solutions to the company's problems might be. Mike, I don't get out much, but when I do it's always to Starbucks. And getting back to basics? Well, between the fractured state of the stores and the comparative earnings, they are looking more like Gap every day.
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.
Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page. For his "Business Press Maven" column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers. Fuchs appreciates your feedback;
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