Starbucks: Coffee And A Salad For $12?

In case you thought that management at Starbucks Corp. (SBUX) did not seem to get it when it went into the music biz, yesterday they made sure.

Starbucks announced yesterday that it will add prepared salads to its menus. Specifically, it will add a tomato mozzarella salad and a "fiesta salad" with grilled chicken, roasted corn and black beans, to its lunch menus nationwide.

The release stated:

The regional selections are tailored to meet the specific taste preferences of each market so customers can get the tastes they prefer at their own local Starbucks. Regional selections include the White Chicken Curry with Couscous, Albacore Tuna Penne, Champagne Pasta Salad, Bowtie Pasta with Goat Cheese, and the Asian Sesame Noodle Salad.

The price tag for one of these gems? $5.50. So now I can get my $5.75 Carmel Macchiato, which is about as healthy as a Big Mac at Mcdonalds (MCD), and even it out with a $5.50 salad? Why won't I go get a quality coffee and salad at McDonald's for half that and not have the 17 grams of fat the Macchiato delivers?

If anything, Starbucks need to find a way to not be "the more expensive and less convenient" option to McDonald's, which is what it iis today. I can only imagine how slow the lines are going to be now as folks ponder what salad choice they are going to make. Plus, a salad needs to eaten sitting down. How many folks actually sit in a Starbucks as opposed to getting a coffee and walking out? If their muffin sales, which are very mobile, are not getting it done, (again, high price and they are a heart attack inducer), this idea will flop on its head as well.

This is ironic in the wake of Howard Schultz's memo in which he feared the company has gotten away from what made it great. Every action it has taken since then has moved the company even farther away from its roots. Peculiar.

I haven't seen a company push this hard in the wrong direction in a long time. This is just a bad idea . . .

SBUX 1-yr chart:

Comments

[farajs:]

Any stock that can go from a high of $40.01 and is fighting to keep its stock around $25.00 needs alot more than a new salad menu. With high gas prices, money first will go into the gas tank. Until Starbucks recognizes this, they WILL not be competing with McDonalds, they will be EATEN by them.

2007 Jun 27 11:59 AM