garrent

Starbucks: Real estate savvy gone bad


There are some street corners in America where you can stand and see two, even three, Starbucks stores competing for your business. It was obvious that that kind of saturation wouldn't last. Starbucks has named the 600 stores it plans to close, and some customers are taking the news particularly hard. You can see the full list of closures by clicking here.

Investors seemed indifferent to the news, and Starbucks shares dropped by less than 1% to close at $14.34. (The stock has dropped 45% in the past year.) That's because the specific list of locations isn't that important. Investors are paying more attention to how the closures fit into Starbucks' larger plan to improve its financials and its share price.

The closures are clear evidence that Starbucks made some sloppy real estate decisions. Why would you open one store a mile away from an existing location? Sure, those stores may have been bustling with business at the time, but as soon as the economy wilted people came to their senses about $5 lattes.

Starbucks had talked about opening 1,000 stores in Florida, for example, by the end of the decade, according to the New York Times. On that fast-tracked schedule, the company had to drop some of its selection standards for new sites. The result? Sixty Florida locations are now slated to close.

Even last year, when an economic slowdown was apparent to just about everyone, Starbucks continued its breakneck pace and opened three new stores a day. Next year, it plans just 200 total. I'll bet each of those 200 locations gets thoroughly vetted.

Starbucks made some arrogant real estate decisions that ultimately left it overextended as gas prices rose, as mortgages flopped and as bare necessities became harder to afford. Closing stores is an important step in turning the company around, but it's just one step in a broad transformation.

i was surprise to see that starbuck wud close down >.<

if u find more news abt it pls post it in here thanks

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VamPyroX

I'm not surprised.

One, why have 2 or 3 locations next to each other?

Two, their drinks are too expensive.

Three, whatever happened to good old-fashioned coffee?

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HuH? I have no problem with Starbucks. I have a friend's work at Starbucks Coffee Co. I will ask her if that's true or not. The latte never get over 5 dollar. It's 2 to 4 dollars between and plus tax. It depend on the size. How did you figure it out? Do you have website for information? I want to see it. If don't have a website. Then I will not buy the story. I want to see proof it.

In my hometown have 11 Starbucks locations.

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sara1981

i read about Starbucks will close 600 starbucks coffee stores but i cant believe i found out that my hometown will close!!!!! URGH my Aunt,my cousin, my mom and i love starbucks very much.

who will close in your hometown?

Starbucks Closure List: All 600 Stores, Searchable
Starbucks Closure List: All 600 Stores, Searchable

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Thank you! I checked the website. Here in my state and cities are many closed. But There aren't any Starbucks closing here in my city. It's weird!

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Phillips

Whew!! My home near Starbuck still there

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Bottesini

Here one Starbucks in our metro area will close. We will still have two in the same mall close to my home. One freestanding in the parking lot, and one inside a Target store.

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I am so LUCKY!!! I love Starbucks!

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CrzyMeg

Me too.

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sara1981

Cities, Customers Launch
'Save Our Starbucks' Efforts
Cities, Customers Launch 'Save Our Starbucks' Efforts - WSJ.com

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Dixie

Growth is good, but too much too fast can cause just as much damage as not enough growth.

This is the scenario that Starbucks is facing.

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VamPyroX

Yay... they're closing 5 locations near my house.

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darkage

Who care... I do not drink coffee at all.

KarissaMann05

Wow... That's so sucks! I love starbuck so much... At the least, "my" starbuck in the Safeway store don't close yet. Phew!

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Credit by KarissaMann05

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Yayaya KM05 Same here. My area have 11 locations of Starbucks aren't closing! Whew!

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Foxrac

No store closing in my area, that's lucky but they are closing in other suburb and several in city of Chicago.

In city of Chicago, they got alot of starbucks.

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