To Starbucks, With Love?

New York Times columnist won't leave Seattle alone.


Only people with nothing better to do--that would be me--read the Saturday New York Times. It's traditionally the thinnest issue of the week, but also home to Joe Nocera's "Talking Business" column. Two Saturdays ago, Nocera basically sent a mash-note to Jeff Bezos, praising's customer service and rising share price. More recently, he penned a memo to Howard Schultz, who just reasserted himself at Starbucks, whose share price has been headed in the opposite direction. That investors are unhappy with the company, once considered a growth stock, is no secret. So out goes CEO Jim Donald, and back comes Schultz, who presumably has more time on his hands since selling the Sonics (and profiting nicely from that deal, too). Sounds great, since Schultz is the public face of the $14 billion company, a great motivator, and ceaseless promoter of the brand. Except, Nocera writes, "What I kept hearing all week was that you?re not a very good manager."

Ouch! And Nocera has some other criticisms regarding Schultz's return, many reflecting what bloggers and Wall Street analysts have been saying for years.

Of course, Schultz invited such criticism with his "we've lost our soul" memo about a year ago. (Former CEO Donald should've begun packing his bags then.) Nocera cites that memo, raps Schultz for "insane growth," hates the smell of egg sandwiches and other semi-cooked foods that've been added recently to boost per-store sales, and encourages the notion--advanced by some analysts--that Starbucks cut back in its store growth (particularly in the oversaturated U.S.) and become a value stock instead.

Here it should be noted that Seattle Weekly is distributed in many, if not most, Starbucks locations around town. (They once banned us from the premises, but fences were mended.) We have an interest in Schultz's vaunted, and often derided, "third place" for sipping and reading. But per Nocera and Jim Romenesko's always fascinating Starbucks Gossip Web site, that model may now be archaic and eroded. And certainly there's more competition from places with better coffee, service, and Wi-Fi. (Even if McDonald?s is getting into the premium coffee biz by adding espresso machines, that's not a place where you want to sit and linger over the paper.)

Starbucks now represents a third place where you sip and read and purchase music online and surf the Net and buy miscellaneous gifts and order a hot snack, all of which can make it feel like a multipurpose trip to the mall. Some people, Nocera and Romenesko among them, evidently feel that Starbucks has lost its aura, its focus on coffee. Others, who probably spend the most money there (if not the most time), may prefer the mall model. Analysts who previously demanded sheer growth (now 15,000 stores and counting) sided with the latter camp. If you own Starbucks stock, you probably feel the same way. Only now customers, and columnists, are arguing that the company scale back on its expansion and lose the retail clutter.

What do you think?

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