Starbucks: Is A "Transformation" Necessary?

In a press release, Starbucks (SBUX) announced it will disclose "transformational initiatives" at its annual meeting next Wednesday. My first thought when I read this was: Is it necessary? Hadn't they done just fine up until this point? Didn't the chain get itself into trouble, in all actuality, when it tried to "transform" away from what it did best?

What should it announce then? Here are some directional ideas:

1. If you are going to claim to be "upscale" or "premium", then you have to act like it. The only thing upscale about the Starbucks experience in many locations is the price. Get rid of all the junk for sale that makes me feel claustrophobic when I try to maneuver myself to the counter. Expand locations to give us more seating. If I have to wait to get my drink made, please ask me to go sit down and then bring it to me. Also, I should not have to clean off the table when I sit down at it. These are not real big things, they are basic, and McDonald's (MCD) currently does them. Yet location after location of Starbucks ignores these. You are not doing me a favor by letting me drink coffee there.
2. Shrink the menu. Do fewer things very well rather than plenty of mediocre offerings. There is a large variation in the same drink from location to location. That may have changed after the recent "training", but with new baristas being hired everyday, the unwieldy menu can only lead to mistakes and more unhappy customers.
3. Organic: Everything sold at the stores should be organic. The population is drifting that way in its food choices and Starbucks ought to be a leader here. This also goes with the "acting upscale" theme.
4. Be Nice: If I order a "large" do not correct me and say "it is called a vente". Just smile and give me a large.
5. Kids. Your stores could not be more kid unfriendly if you tried. Everything for sale is waist height, which means any kid under 6 will look at it, touch it and possibly break or try to eat it. I am not saying put a jungle gym in, what I am saying is that less people with children will avoid the locations if they do not fear the damage their children may cause.
6. Price: You are at the top.

None of these are a magic bullet, but when taken together and enacted, they will begin to change some of the negative sentiment that has built up out there towards the chain. Many of these things were all done years ago, but Starbucks drifted away from them in an effort to maximize dollar per square foot. In all reality, by drifting from their core, they alienated many people.

Disclosure: Long MCD.

Comments

[steveballmer:]

All I want to know is why Starbucks discriminates against hetero's!

2008 Mar 16 06:26 AM

[mjn185:]

I could not disagree more on the majority of your points. The one that I do agree with is the seating. Often times there is not much room to sit and that could be improved. With that said and as you stated Here is how I see it.
1. Cleaning tables: To have a bunch of barristas running around wiping up tables is the last thing that I am looking for from Starbucks. Stay behind the counter and make the drinks. You can wipe up your own muffin droppings. Could you be any more lazy. If you want a resteraunt atmosphere go to Mcdonalds with a hundred loud people.

2. Not really sure that shrinking the menu is called for. The majority of the drinks all start from a similar coffee base and it is normally only syrup or milk that makes the drink different so I am fine with the variety.

3. As far as Organinc. Give me a break. There is a small albeit growing group of people that like organic but and this is a LARGE BUTT. Organic milk costs more and does not last as long. We have all drank non-organic milk our whole lives and there is no reason for Starbucks to voluntarily take on a lower profit margin item which they will have to pass along to the consumer in the way of higher prices. Which seems to be one of your major complaints. I also see that there is no "but McDonalds does it"reference here.

4. Point four about being corrected by the Barrista is an absolute joke. Do you expect any of us to believe that this happend or that if it did that it was something more than an isolated incident. Get over yourself.

And now for the most ridiculous statement made in this article. MAKE STARBUCKS KID FRIENDLY.
Let me tell you a little something about that. When I go into any establishment that charges a premium the last thing I am looking for is a bunch of yelling screaming kids running around. I live in Northern Virginia where at the finest resteraunts parents allow their children to run and yell. It is ludicrous. Some places should never go kid friendly because uncontrolled kids ruin others experience. Now I will say upfront that I have a six year old son and there is no way that I would think to take him to a fancy resteraunt nor to spend my time with him in a Starbucks. You want kid friendly (yelling screaming crying and running) I can point you to the nearest McDonalds for your dining and drinking pleasure.

In short come up with something real to complain about. Like long lines driven by inadequate training. Drive thrus that cheapen the experience. Something anything other than the drivel that you have layed forth in your article.

2008 Mar 16 07:23 AM

[PhillipP:]

I could not agree more with the above comment, especially about kids. The reason I dont go to Dunkin Donuts is all the kids running around screaming. I go to Starbucks to chill, have something indulgent, and people watch. As far as "all the junk for sale" I have often found last minute gifts of CDs, cookies, and coffee mugs there so, for me, it kills two birds with one stone.

2008 Mar 16 08:48 AM

[BudH:]

Cleaning the tables after messy patrons is a must. The newer people can do this while the barrista makes drinks. As for merchandise, sometimes less is more. Sell the 'organic' ingredients for a bit more to cover the added cost. Good thoughts by everyone above.

2008 Mar 16 01:20 PM

[meganjune:]

If you are requesting a more upscale environment, the last time I checked most restaurants frown upon small children because they can be loud, unruly and obnoxious. If you dont like Starbucks then go somewhere else, support a local coffee shop, especially if you prefer to say "large" instead of Venti.

2008 Mar 16 01:25 PM

[CoffeeJohnny:]

Customer service is totally alien to Starbucks with the production line ending with the frothy jugger not even looking at you when they dispense the drink - i say dispense because they have as much ambience as a pharmacy

2008 Mar 16 03:12 PM

[brewboy:]

Add: Reinvest in the facility. Upscale means clean AND FRESH. Stop being cheap on replacing worn out or stained items in the dining areas, etc.

2008 Mar 18 05:53 PM

[tegalk:]

Starrbucks, don't discriminate against people with children. I'm sorry, but I don't consider Starbucks to be an elite or upscale establishment, as some on this forum have suggested. It is a run-of-the-mill coffee shop which should cater to all types of people, including children, who are, the last time I checked, people too.

2008 May 28 05:39 PM