Starbucks and the Global Financial Meltdown
Turns out you don’t need no steenking stockbroker. Let Starbucks be your financial guide.
Basically, the greater the concentration of Starbucks’ in a country’s financial capital, the more likely it is that this country is reeling from the financial crisis. Coincidence?
In the U.S., Starbucks is hopelessly intertwined with the real estate and credit markets that have crashed and burned. Out of all the jillions of Starbucks locations, most of them are either in the newest developments of America’s suburbs and exurbs, or in the business districts (especially the financial center) of large cities. (And of course if you have a favorite local coffeehouse with that certain intangible vibe you can't find anywhere else, a Starbucks will spring up next door and put them out of business.)
Most large investment banks have a Starbucks on their ground floor. And the Starbucks nearest to the former Bear Stearns headquarters has already closed.
The author of this article, Dan Gross, says:
“Like American capitalism, Starbucks, fueled by the capital markets, took a great idea too far (high-quality coffee for Starbucks, securitization for Wall Street) and diluted the experience unnecessarily (subprime food like egg-and-sausage sandwiches for Starbucks, subprime loans for Wall Street). Like so many sadder but wiser Miami condo developers, Starbucks operated on a ‘build it and they will come’ philosophy. Like many of the humiliated Wall Street corporations, the coffee company let algorithms and number-crunching get the better of sound judgment: If the waiting time at one Starbucks was more than a certain number of minutes, Starbucks reasoned that an opposite corner could sustain a new outlet.”
Now let’s look at some other countries. South Korea (253 Starbucks locations), England (256 Starbucks’ in London) and Spain (48 Starbucks’ in Madrid) are all reeling from the financial meltdown.
On the other hand, Italy (number of Starbucks’ in the entire country: ZERO) hasn’t had any major bank failures. The entire continent of Africa has 3 Starbucks’ and no major bank bailouts. Ditto for Central America.
Argentina (one Starbucks) is doing relatively well in this crisis. There's hardly any Starbucks presence in Holland and the Scandinavian countries, and their banking industries are also holding up.
The article closes with:
“And so, if you're looking for potential trouble spots, forget about the Financial Times or the Bloomberg terminal. Just look at the user-friendly Starbucks store locator. The next potential trouble spot? I just returned from a week in Istanbul, Turkey, a booming financial capital increasingly tied to the fortunes of Western Europe. It has a storied coffee culture, yet I gave up counting the number of Starbucks stores occupying prime real estate. It turns out there are 67 of them. Watch out, Turkey.”
cross-posted at Bring It On!
Labels: Dan Gross, Starbucks Financial Meltdown
posted by Tom Harper @ 3:43 PM
18 Comments:
Oof! The company I work for sells Starbucks Coffee in a corporate environment. Someone's goin' down.
Lew: Uh oh. We may all have to emigrate to Italy or Scandinavia, where there aren't any Starbucks franchises.
Half my ancestors are Swedes — people, BTW, who've made enjoying good coffee a national pastime. I got that gene, big time. Even so, Scandinavia is a bit chilly.
Sunny Italia would be a delight, and there's no shortage of espesso and demitasse there.
The post's point about the coincidence of Starbucks and troubled financial centers is fascinating. I read recently Starbucks is closing down some of its locations. Not too many, I hope.
I thoroughly enjoy Starbucks coffee. I just wish they would go back to offering different coffee-of-the-day selections instead of it always being their Pike's Place somethingorother. That blend is good, but hardly their best. Now, the adventure of sampling different coffees by the cup is gone.
D'ya ever get the feeling that as sure as everything is changing, most of the changes are for the worse?
SW: Yes, Starbucks is closing a lot of its franchises. They recently closed a store here; it was just opened about 6 months ago. The only other Starbucks in town is inside Safeway.
I also like Starbucks coffee (but I'll always like Peet's better) but most non-franchise coffeehouses make better espresso drinks.
I keep boycotting them.
Enemy: I don't really have anything against them, other than the way they always locate themselves next to a mom-and-pop coffee house so they can put them out of business. It sucks, but that's what big franchises do.
They're supposed to be a good company to work for, and they do that fair trade coffee, in case that's anything other than just a slogan.
we have 2 in Prague. Should be okay
Prague Twin: You should be safe. I don't picture much of Eastern Europe going crazy over Starbucks.
That damn Howard Schultz...first he sells my beloved Sonics and now this.
J: He's gonna ruin Seattle.
To be honest, I really liked the old coffee shops and never really had a desire for Starbucks.
They remind me of Wal Mart, running all the other stores out of business.
I don't think I've ever been in a Starbucks. Cheaper to brew at work.
NOTE: Sorry for the delay in publishing the last two comments. My computer is in the repair shop (viruses, again!). For the next day or two (hopefully not longer than that) I'll just be going to an internet cafe once a day. I probably won't get a chance to post or visit other blogs until I get my machine back.
It's a frivolous idea, but the concept completely falls flat on its face. Take Australia, for example. Months before the credit meltdown, Starbucks was already getting out of Dodge:
http://www.news.com.au/dailytelegraph/story/0,22049,24096677-5014099,00.html
Always been a Dunkin' Donuts man, myself. Any Dunkin' correlation that you know of?
Tom, sorry to hear about the virus problem. Hope they can straighten it out for you.
paul mauldin, I notice Dunkin is selling packaged coffee in other stores now, just like Starbucks.
While we're on the subject of coffee here, anyone else remember when Denny's boasted about serving genuine Kona coffee from Hawaii — which was very good?
Sorry to say, those days are long gone.
Come over to the Ubuntu side of life, Tom. you can do just about anything you are doing, only you will do it facing few viruses and paying nothing for the software and the apps. I've been Linux off and on for 10 years (as a Unix configurator of hospital machines back in the day, it was a natural fit) and I love it. Never again will Mr. Gates, Symantec, or any of those other jerks collect anything from me except contempt.
Starbucks had some good philosophy in their way of doing things, but I also saw too much Mao-Mart in them. I can't say that I'm mourning their decline.
JR: I'm definitely going that route the next time I get a virus attack that I can't fix myself. I don't use any Symantec products any more, but it'll be time to go the Linux route if this happens again. I've used Unix a tiny bit, at a job a long time ago. It would take some getting used to, to switch over to Linux, but I'm totally fed up with Symantec and Microsoft.
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