Starbucks' Latest Move- Retrenching!

I've written nine labeled posts about Starbucks over the past nearly-three years. Perhaps more, since some are still awaiting labels.

This one, from just last May, suggested that returned Starbucks CEO Howard Schultz and his handpicked strategist, Michelle Gass, had it all wrong in predicting a sharp uptick in the coffee giant's imminent performance.

As I scan the headline of the Marketplace section of last Wednesday's Wall Street Journal, "Starbucks to Shut 500 More Stores, Cut Jobs," I see I was right.

If you go back through either the Starbucks- or Schultz-labeled posts, you will note the strong theme of continued growth at the coffee roaster. One of the recent posts observed that Schultz viewed new segmentation strategies as the key to continued growth amidst a weakening US economy.

And now this. The firm currently has 11,000 US stores. I had no idea its footprint was so large. According to the Journal article, 70% of them, or more than 7,000, have opened in the past three years.

Easy come, easy go, Howard and Michelle?

Two problems he didn't have a while ago now plague Schultz- Nelson Pelz and a customer revolt to the new signature brewed coffee at the firm. Seeking to broaden their appeal beyond espresso-based coffees, the new, more mainstream flavor is, of course, quite different and missing the robust cache of the former featured coffee.

I think I was on the mark when I noted, simply, that Starbucks is feeling the effects of Schumpeterian dynamics, and there's really not much they can do to mitigate the consequences, try as they might.