Coffee Industry in a decline??
Posted by: Chirag Jain on: August 9, 2008
Just after the chocolate industry and cocoa makers felt a pinch, the coffee industry has no capital left in its coffers!
The biggest coffee seller in the world, Starbucks announced a month ago that it would close around 600 Starbucks coffee stores and in turn, push out 12,000 employees. With the recession coming and subprime crisis looming, and
American spending on restaurant and coffee shops declining, its no wonder that many competitors of Starbucks may follow suit.
Democrats, led by house speaker have gone to the extent of saying that when they come in power, they would “seriously consider nationalizing the coffee industry to ensure the free flow of java at fair prices.”
Don’t think that just because its big it is affected. Smaller, and much younger cousings of Starbucks too face a similar situation : The Beanscene chain of coffee shops, which has all of 14 stores and 142 staff is up for grabs after a similar condition of gloominess in England and other parts of the world.This was a month ago. But….
Just yesterday, about 150 parties expressed interest in buying the coffee seller. Seems like a reversal in coffee maker’s fate and coffee industry.
What are your says on the same. Is the coffee industry going down, or its caught its breadth and is on the rise once again? Comment, or participate in our poll!!
4 Responses to "Coffee Industry in a decline??"
August 10, 2008 at 12:04 am
This logic essentially buys into Starbucks press machine hook, line, and sinker. I cannot believe people can be so gullible.
It’s in Starbucks interests to represent their foundational problems as the external whims of the marketplace — when in effect they have been self-inflicted.
Meanwhile, while Starbucks plays its “woe is me” economy sad song, competitor Peet’s Coffee & Tea last week reported a 59% gain in Q2 profits.
So if Starbucks wants to keep telling lies that this is external and beyond their control, people can believe that hooey at their own peril. Because competitors of the likes of Peet’s, who essentially schooled Starbucks how to do their job from the beginning, is making money hand-over-fist right now.
Starbucks is just telling us, “Pay no attention to the man behind the curtain.”
August 10, 2008 at 2:58 pm
With only 14 branches (all in Scotland, not England BTW), Beanscene is hardly a bellwether of the global coffee shop market.
Given that there are a reported 150 rival bidders for the company, including the original founder, this would suggest that there is considerable confidence in the business concept and the continued profitability of the coffee shop market in the UK.
Beanscene has been a victim of the credit crunch in that promises of finance from investors were withdrawn in the middle of an expansion plan.
They are paying leases on 5 premises that they didn’t have the cash to fit out and start trading. The business was simply unable to sustain the overheads.
The massive global growth of the coffee shop may be slowing, but little can be inferred from the financial misfortune of a tiny Scottish concern.
August 11, 2008 at 1:15 pm
Great research done Frank!! I think these statistics do throw some weight behind the fact that global growth of coffee shops is just slowing,, and not on the downside.
But consider starbucks whose 600 shops have to be closed down, and we’ll accept that if trouble is brewing at the biggest one of the all, the small ones have not been spared by the credit crunch.
August 9, 2008 at 8:53 am
Oh what a great relief for me, i am happy for a change as my cup of coffee will be cheaper now, thanks chirag for making me happy in these inflationary times, at least one thing can be cheaper now.