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Changing times for coffee achievers

Posted on February 12, 2009 by Staff

By Margot C. Lester
Staff Writer

At the end of last month, global coffee conglomerate Starbucks announced it was cutting 6,700 employees, closing stores and slowing expansion plans in the wake of big declines in revenue. One factor cited in the announcement was customers’ changing buying patterns.

During its first round of closings in July, Starbucks shuttered the store at 141 Chatham Downs in north Chatham County. Right now, there’s no indication any other local stores are on the chopping block.

It seems fair enough that people who had been spending $5 or more on a fancy cup of joe (half-caf, skinny, soy latte or whatever) might decide they could do without the extra foam in order to save a few precious pennies. But what about local coffee drinkers of a more independent ilk? Are they cutting back?

“Spending trends do vary,” admits Scott Conary, owner of the Open Eye, Caffe Driade and Carrboro Coffee Company. “People say, ‘I’ll cut that out’, but it doesn’t last. Our customers realize coffee’s an affordable luxury. What we do see that’s a positive overall is people being more careful to spend money on good coffee and in the day-to-day making of it,” he says.

So instead of shelling out $3.50 for a latte, customers may be opting for a $1.25 espresso. Conary says sales of whole beans are up slightly, too, indicating that more people may be pulling a jolt of joe at home more often than they used to.
What does Conary make of Starbucks’ announcement?

“It’s sort of hand waving and hoping to get a market response,” he says. “They’re paying attention to Wall Street, so the things they cite aren’t the real issues. For instance, what their CEO is willing to give up in salary isn’t enough money to make a difference to their company. But as we’ve seen recently, Wall Street works on whim and ideas, not reality.”

Conary thinks the bigger problem facing Starbucks is that the company did what it set out to do, get more people drinking more fancy coffee.

“The introduction to coffee is probably what Starbucks does best,” Conary says. “Now people are moving on. There’s been a shift in how people view coffee and what it can and should be.”

That’s good news for shops like Conary’s that focus on educating coffee consumers on quality, sourcing sustainably produced beans from fairly compensated growers and providing more than just a good cup of java. People are connecting with the coffee in a more personal way, prompting many to eschew cookie-cutter corporate outlets serving frilly joe. That’s probably causing Starbucks to have a little bit of an identity crisis.

“Who’re they going to be now?,” Conary asks. “They’re cutting out decaf after 12 p.m. and introducing oatmeal. They’re trying a little bit of everything at this point.”

1 thought on “Changing times for coffee achievers”

  1. Pingback: Small cafes holding their own | coffee business strategies

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