WHERE STARBUCKS WENT WRONG

A bitter-tasting jolt for Starbucks!

By Alex Beam

It couldn’t happen to a nicer bunch of people. The collapse of Starbucks, I mean.

This week the Seattle-based coffee kahuna announced it is closing 600 of its 6,800 US stores and laying off more than 12,000 employees.

What went wrong at Starbucks? To invoke the venerable business cliche, they didn’t stick to their knitting. Their core business was overcharging consumers for coffee, and a very lucrative business it was. Huckster-visionary-entrepreneur Howard Schultz took the Starbucks concept and wallpapered the land with the buxom green mermaid logo and espresso-slinging baristas. Then they started selling dreamy CDs, and the company even helped produce a movie, “Akilah and the Bee,” that bombed at the box office. Schultz bought a basketball team and started hanging out with Mick Jagger and Paul McCartney, the usual recipe for business disaster.

What now? Starbucks is throwing a couple of Hail Mary passes. They’ve just introduced a new, brewed coffee called Pike Place, which tastes OK, and, like their other regular brews, costs the same as Dunkin’s coffee. Taking a page from Jamba Juice, Starbucks plans to start offering “healthy,” protein-boosted smoothies and a new frozen drink, which Schultz is calling “a game changer in the coffee space.”

It’s hard to change a game that’s already over, but there’s no harm in trying.

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