Earlier this month, Justin told you about Starbucks CEO Howard Schultz popping by our offices and saying, among other things, that the coffee chain was really starting to feel the pinch from sluggish consumer spending.
Let’s put that one in the “you heard it here first” column. Today in reporting preliminary Q2 results, Starbucks played up how much it’s getting slammed by the re… economic slowdown, putting the macroeconomy right up there in the first sentence of its press release. “The current economic environment is the weakest in our company’s history, marked by lower home values, and rising costs for energy, food and other products that are directly impacting our customers,” Schultz said further down in the release. That’s had “a substantial impact on our performance,” he said—i.e., declining traffic and same-store sales.
Now, as a person who has written a story or two about Starbucks, I can tell you that this is not a gang that’s quick to blame the economy for their troubles. When the folks out at the Seattle mothership start pointing fingers, it means something. Yesterday, blog poster Tan Boon Tee took the stock market to task for not better reflecting the gravity of our current situation. Would a Fortune 500 CEO be a good substitute?
In the meantime, Starbucks is also tackling a bunch of other issues, like lackluster innovation and burgeoning competition. There have been a lot of changes recently in response to that. I’m curious to know the extent to which that’s registered with customers. Mind telling me how, if at all, your Starbucks experience is different than it was, say, this time last year?