Retail
As Americans Make More Coffee At Home, Starbucks (SBUX) Faces Trouble
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The recession is claiming another American habit. People are not going out to drink coffee. They are making it at home, probably to save money.
The National Coffee Association, which tracks these habits, says the move toward not buying coffee at delis, coffee shops, and places such as McDonald’s (MCD) and Starbucks (SBUX) is a significant trend.
According to Reuters, an NCA poll shows “Of the people who said they had drunk coffee the previous day, 83 percent said they had made it at home — up 5 points compared with year-ago figures.”
Starbucks is desperate to get people back into its stores. It has even broken with its tradition of offering high end coffee drinks using expensive ingredients at very high prices. The chain now has cheap breakfast meals and java products which cost about what they would at the local coffee shop.
Less expensive coffee may not help dig Starbucks out of its earnings hole. People who do go out for coffee don’t go to Starbucks as often as they used to, and now many fewer people go out at all.
Douglas A. McIntyre
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