5 Reasons Starbucks is Doing Poorly

No longer a corporate giant?
The Starbucks story is really an amazing one. Howard Schultz, the founder of Starbucks decided to bring a little of Italy to us by offering European-style coffeehouses. The company grew from a couple stores to more than 14,000 stores in many countries within a short amount of time. It seemed as though nothing could stop its growth into a corporate giant.
But then suddenly, Starbucks wasn't the same anymore anymore. Just a year ago, the stock was trading at about $28, but now it's at about $15. In addition, they've just reported their first quarterly loss. What's the cause?

1. The Starbucks Experience: Starbucks wanted its customers, when entering any store around the world, to immediately feel like they are at their "third place". The smell, the comfy chairs, the artwork, and of course the people. But many argue that it's gone. Starbucks has lost its buzz. Customers now feel that Starbucks is too commercialized now, rather than having the feel of an independent coffeehouse.
2. Self Cannibalism: Starbucks has become way too big, expanding in certain countries to the point that some believe that stores are too crowded and take business away from each other. This is only the case in some cities. In New York City, for example, all of the stores are full, and not only because of the free washrooms.
3. The Coffee: Starbucks has been too focused on building its brand more than developing its coffee. Before all these fancy drinks, people came to try different blends and come for coffee that is unique. Now, the company has left that and has moved on to establishing itself in other areas like the music industry. This is all great, but Starbucks has to get back to its core if it wants to win over its more loyal crowd. Also, the prices on the drinks are way too high, which is the biggest problem I have with the chain. Lower the Prices!!
   
4. Recession: I've looked at a list of the areas in th U.S. hardest hit by the recession, and compared it to a list of the store closures. Florida, for example, has 59 stores closing out of 600. That's about 10% of all the stores! Obviously, there is somewhat of a pattern. And many of the stores are ones right next to each other. The most store closures are in California though, a state hard-hit by the recession. For a full list of the store closures, see List of Starbucks Store Closures. For an overview of the states and the recession, see Is your state in a recession?
5. Rising Oil Prices: With oil prices through the roof and people looking for a cheaper way to get around, some people are skipping their $4 cup of coffee and opting for a cheaper cup, perhaps at a different coffee shop. Do the math. buying a $4 coffee evry day for the whole year amounts to $1460 a year!!! Buying a $2 coffee would save you $730! That's a lot of money.Imagine the savings for people who buy more than one a day.

I love Starbucks and I really hope it succeeds. I like Howard Schultz and I believe that he has the ability to turn the company around.
Please comment. Any reasons why you think Starbucks is doing so poorly?