24/7 Wall St. TV: Starbucks (SBUX) Brand Value Drops 40%

Starbucks (SBUX) brand value dropped 40% to $7.3 billion. Starbucks ran the playbook on hurting a brand’s value. The public perceived that it did not offer enough value for the dollar, particularly as the economy fell apart. Starbucks over-expanded and ended up with too many stores, which forced it to close several hundred and layoff thousands of employees. Since Starbucks is supposed to be a “good” company, that did not help its image.

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The firm was slow bringing out lower-priced products which helped McDonald’s and Dunkin’ Donuts in their efforts to get market share from Starbucks. The company’s most recent earnings indicate that its same-store sales and revenue are at least beginning to stabilize, but the future of the company is going to be based on how well and how quickly it can dig itself out of a deep hole.

Data from BrandZ

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Executive Producer:  Philip MacDonald