Whats the reason for starbucks closing 600 stores?

Question

is it because they buisness is going down because of the high prices? or what?

Answer 1

I know why and it is not that they opened so many stores.

ADDITIONAL

Plenty of reasons to shut down so many stores. First, in my area the Starbucks being closed are older and in need of a little renovation. That is time to shut down before reopening. If the store is profitable but not profitable enough to re-open, you simply shut the store.

Also, Starbuck has gone to kiosks in grocery stores. That is relatively inexpensive to operate and the profits are pretty good. Those kiosks don't show up against the # of Starbucks stores because the grocery story owns them and pays Starbucks. Starbucks doesn't chat that up because the people that work at that kiosks are NOT Starbucks employees.

So while some foot traffic is down, the decision to close 600 older stores is somewhat misleading. The stores may not be as profitable as others. But the need to refurbish makes it cheaper to replace the store at a new location or at a kiosk. The kiosk is pure profit and employee costs are moved to the grocery store not Starbucks.

Therefore, many variables contribute to the corporate decision, not just a sagging economy or over extending or poor locations. They will continue to expand, their locations are generally good but they will cut cost....which means employees rather than locations.

Answer 2

no, its none of those.

I think its because they expanded too quickly and opened a bunch of stores in places that wouldnt get a lot of sales. Now, they would have to close them because of the high costs of things (or else lose money)

Answer 3

They overextended themselves and threw up too many stores it areas that didn't see the appeal of $4 coffee drinks. It  also doesn't help that people are strapped because of inflation and a downturn in the economy.  They also are facing competion on a number of different levels.  I actually saw an expert taster rate McDonald's new coffee  better than the Starbuck's brand on a primetime news show.  He was very reluctant to give his opinion but when prodded he picked McD's.  Personally I like Dunkin Donut's, wish there was one here.

Answer 4

The downturn in their business started when they moved away from their original business strategy.

(the show and shine) and instead aimed for mass production to maximize profits.

Most people have figured out that the 4.00 coffee at starbucks is nothing special and have moved back to making their own, or getting it from the gas station.

The downturn in the general economy is also playing a part in that people do not have as much discretionary money now that gas is 4.00 a gallon.

Answer 5

MONEY, MONEY ,MONEY! THEY HAVE OVER EXTENDED THEMSELVES TO PUSH EVERY ONE ELSE OUT OF THE COFFEE BUSINESS. NOW THEIR STOCKS ARE DROPPING AND THE SHARE HOLDERS DON'T LIKE IT.CUTTING BACK STORES WILL CUT EXPENSES TO HELP THEIR STOCK VALUE.

Answer 6

A cavalcade of economic troubles, from imploding housing markets to rising gas prices, has pinched consumers, hurting not just Starbucks but nearly all retailers. The chain is struggling to attract customers for the afternoon frappuccinos they once bought eagerly.

Answer 7

its a business move cuz the economy sucks. here is a list of the closing stores - http://starbucksclosingstores.blogspot.c...

Answer 8

Those idiots opened a store on every street corner. Obviously, they are not going to be all busy all the time. They have clearly opened too many stores, we don't need one every block. I could see this coming from a mile away. It's just like CVS and Walgreens drug stores, any time now they will be closing some of them because they built too d**n many.