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10 pts

Opinion on  Starbucks Corp (SBUX)     Sector: Services  >  Industry: Restaurants
Smell the coffee?

Jul 07, 2008 06:59 PM UTC
Olive_baboon
Return Risk
-10.20% MID
Analyst

Last Christmas, when I first noticed the $1,000.00 coffee machines stacked at the end of the bar,  I got to wondering exactly who does this company expect to do business with?
This year, when they closed down for three hours to retrain the counter staff, my confidence was not restored.
Likewise, when the Saudis beat up that American business woman and threw her in jail for sitting in the Men Only section of one of the company's locations in the Magic Kingdom.
Now people are complaining that the coffee experience is too standardized.  Trouble is, standardization is what normally keeps you from getting a bad cup of coffee, or in the case of Starbucks, a really bad cup of coffee.  If the company backs off from standardizing its product, which many consumers are seeing as overpriced compared with $4.23 9/10 per gallon gas, they will continue to lose.


SBUX:  This call was made on 07/07/08 @ $14.875
Rating:   Negative   $14.875 (07/07/08)
Gain/Loss:   +33.71% in 184 days
Target:   $11.00 (-26.05%) in Six months


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