July 6, 2008
So Starbucks is closing 600 stores?
And the business media is
running around trying to
answer the question, "What's
wrong at Starbucks?"
There's nothing wrong at Starbucks - they just built
too many stores - proving there is a limit to the
specialty coffee market.
This is a replay of what happened at McDonald's in the
1990s. Trying to impress Wall Street McDonald's
management launched the Convenience Strategy and
built a few thousand unnecessary stores. Same store sales
fell and the world asked "What's wrong at McDonald's?"
Oak Brook had a ready answer. They simply blamed
everything on McDonald's franchisees, never admitting
they'd built too many stores.
At Starbucks there are few franchisees to blame so
management has to take real responsibility for their