We’ve long made it a policy to not cover superfluous news stories on Starbucks here because, well, they’ve long been irrelevant to quality coffee. But here’s one from Down Under today that is: Starbucks to close 61 Australian stores, cut 685 jobs | The Daily Telegraph.
Now we like looking for the hidden story behind the story. For example, a month ago when newspapers plastered their pages with news of Starbucks’ plans to close 600 U.S. locations (a story we considered irrelevant to quality coffee), we wondered why most ignored their plans to open some 200 new cafés next year. (Not to mention how the mass extinction event that affected hundreds of frozen yogurt chain stores in the 1990s never elicited this kind of “death watch” media attention and public mourning in the press.)
Starbucks has notably fizzled and failed in countries where there were good quality coffeehouses before they came along — nearby New Zealand, for example. With Starbucks closing some 70% of their Australian cafés over the next few days, it appears that Starbucks is finally listening to what Australian consumers have been telling them all along: “you lower the standards here.”
What is surprising is that Starbucks is bothering to leave any cafés open in the country at all. Looking at Starbucks’ Web site (Starbucks Coffee Company – Announcement to Customers 29th July 2008), we learn that they are consolidating their remaining Australian cafés in Brisbane, Melbourne and Sydney — Australia’s major metropolitan centers. In other words, Starbucks’ Australian strategy is to focus on tourists, business travellers and expatriates who are brand-loyal (read: brand-blind) enough to not realize that you need only swing a dead cat to find better espresso elsewhere in the country.
Sure enough, look no further than the 69-percent quarterly profit rise posted by competitor Peet’s Coffee & Tea last night: Peet’s shares soar after 2Q report – Forbes.com. Curious that Starbucks’ new line of smoothies, introduced last month, are branded Vivanno. The word “Vivanno” looks curiously derivative of the Italian word vivranno, meaning “they will live”. Wishful thinking, perhaps?
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