starbucks USA's world domination push scaled back

one of the core strategies of starbucks and a strength is it's world dominatkion strategy where they put up outlets like mushrooms popping out everywhere. not just everywhere, but in the choicest and best locations anywhere. some have called their criteria for location as "main street corner main street".


the previous chairman and founder of starbucks, howard schultz has recently come back from retirment and took over starbucks. it's stock price has been cut into half and it's growth stalled and shultz is expected to return starbucks to it's glory days. (dicussed in WAWAM!, read about it here: http://the-wawam-file.blogspot.com/search/label/starbucks)


as part of shultz' move, starbucks will scale down it's US operations, pulling back it's world domination strategy. read the excerpts:

Starbucks to Close More Stores
By JANET ADAMYJuly 1, 2008 5:29 p.m.

In its most significant pullback yet to its U.S. expansion, Starbucks Corp. said it will close an additional 500 U.S. stores and cut 7% of its work force.

The move effectively ends Starbucks' era as a break-neck growth company, one that blanketed the country with about 11,000 locations nationwide since the late 1980s. It's also a sign that the specialty coffee business is taking a troubling turn just as mainstream companies like DMcDonald's Corp. are beginning to invest heavily in it.

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Throughout this decade, Starbucks opened hundreds of locations across the country to boost sales growth and siphon traffic from stores where long lines were driving away customers. The density of Starbucks in places like New York and other large cities turned the chain into a ubiquitous American symbol, spawning countless jokes about the chain's prevalence.

But last year, as Starbucks sales began to soften, it became clear that the company's growth was cannibalizing its sales in a way that was threatening the
chain's success, as well as causing the quality at existing locations to slip. Analysts have said that Starbucks lowered the bar on selecting new locations in recent years.

"We recognize that it is necessary to make decisions that will strengthen the U.S. store portfolio," Starbucks Chief Executive Howard Schultz said in a statement.

Starbucks has been struggling to lure customers amid a slowdown in consumer spending and increasing competition from other coffee and restaurant chains. Mr. Schultz took over in January to revive the company, whose stock lost about half its value in the year before his return, but the company's shares have yet to rebound. He has been speeding through changes, including introducing a new daily brewed coffee that has helped boost Starbucks' drip coffee sales but has alienated a small group of loyal Starbucks customers.

read in full here : http://online.wsj.com/article/SB121494400432420449.html?mod=googlenews_wsj