Wednesday, July 30, 2008

Starbucks closes when it realises its coffee is shite

Coffee chain Starbucks says it will close 61 of its 84 stores across Australia by Sunday, shedding 685 jobs in an effort to shore up its international business.

The company says the stores will close because they have been under-performing.

Twenty-three stores will remain open in Sydney, Brisbane and Melbourne, where Starbucks says it wants to refocus on its core operations.

The multi-national last month announced 600 stores in the United States would close as sales plummeted against a background of a weakening US economy.

About 12,000 jobs were lost.

In a statement, the company's chief executive Howard Schultz says the company is well into the implementation phase of transforming Starbucks.

The statement says today's difficult yet necessary decision will help support the ongoing growth of Starbucks' international business.

In a prerecorded interview released by Starbucks, the company's Asia Pacific president John Kulver says the company will help staff who lose their jobs.

"We want to make sure that we're doing everything we can as a company to support them with this restructuring," he said.


A customer at Starbucks' Albert St store, Nicola Rae, of Margate, said the global chain would probably not be missed.

"I don't think so, I think there are a lot of good coffee shops, especially privately owned ones and small businesses," she said.

Rod Wakefield, of Brisbane-based rival chain the Coffee Club, said Starbucks might have had issues with site selection and a limited food menu in "a very competitive industry".

"It is difficult to come into Australia, which has a mature coffee drinking population, and where there is a preference to sitting down and relaxing with a full cup of coffee instead of a paper takeaway cup," Mr Wakefield said.
Others in the industry suggested Starbucks was struggling with overpriced coffees that failed to meet the standard in Australia's $3 billion coffee market.

Jordan Stamos, co-owner of the Three Monkeys coffee shop in Brisbane's West End, said Australia boasted the last two World Barista champions and was increasingly well-educated about espresso.

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