Starbucks Corp (SBUX)

mythicalmike4 (< 20) Submitted: 11/27/07 1:32 PM

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I am concerned for SBUX in the near term but I'm not buying into the McDonalds coffee hype. I've tried the new experience at McD's several times b/c it's so widely linked to SBUX problems. Nothing has changed ... the coffee is still really bad and is more often than not more closely associated to hot, brown water. The lattes are better than the coffee but inferior to SBUX. People will cut back their spending on things like SBUX and drink McD's when $$ times are tough. They will go right back to better coffee and better service as soon as the economy turns positive again.

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abitarecatania (96.59) Submitted: 11/27/07 7:28 PM

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Concur, "People will cut back their spending on things like SBUX ". MCD and "foo foo" coffee saturation on every corner will
put a dent in SBUX bottom line. MCD is a small part of restaurants taking SBUX market share.

Good reply a REC to you.

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ccarpal312 (< 20) Submitted: 11/29/07 7:23 PM

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SATURATION is the point, they may open more store in other countries but I think they will not grow
At any speed like it has here.
When I go, I order 1 large reg. Coffee, I'm not a regular.
They will not be expanding their regular costumer base, the people who like it will continue to go
The rest of us will make our coffee at home or pick it up at the gas station for a $1.25

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abitarecatania (96.59) Submitted: 12/08/07 7:19 AM

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Concur. I still like the thought of Ronald physically beating the Mermaid and then forcing her to eat MCD until she is an obese half fish.

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Gtrinvestor (99.96) Submitted: 12/18/07 3:13 PM

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(SBUX) - something tells me you need to go to anger counseling... but your post is still funny as hell. I rec for you Mr. T.

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Gtrinvestor (99.96) Submitted: 12/18/07 3:16 PM

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Dude, you need anger management classes... but I still love your post, I think it is outrageously funny. 1 rec for you.

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abitarecatania (96.59) Submitted: 12/20/07 4:45 PM

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I thought about adding in the Ronald McDonald inner city gang beating down the Starbucks' hippies, but I thought I had enough violence already for one post.

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Baseballguy22 (< 20) Submitted: 1/04/08 2:37 PM

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Mcdonalds isnt a competitor of Starbucks, Starbucks generates 60% of their sales from customized drinks and only 12% drip coffee, MCD doesnt do customized drinks and never will, and guess what,, Starbucks even supplies Mcdonalds with their Seattle Best Brand,, so what little they may loose in drip coffee sales they more than make up for it with their supply agreement, the reason behind the drop is the smart money knows this is a 10 bagger stock, A global company with no real competitor and high margins, the only way they can get in for the long term is bash the stock over and over untill it reaches a buy in point,, it will base out in the $18 range and will be over $30 before the end of the year,,

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equalfuture (< 20) Submitted: 1/07/08 3:43 PM

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what would you do, if someone bigger, with more locations, a huge international presence and lots of money, just announced today that they were going after you, mcdonalds just did that today, the goliath just announced that they are going after the latte business, i pity the fool who would want to challenge the seven foot clown

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abitarecatania (96.59) Submitted: 1/12/08 3:50 PM

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Great timing. I guess you might want to write Time Magazine etc... about this.

Brewing Battle: Starbucks vs. McDonald's
"I read the news this week that a battle is brewing between Starbucks and McDonald's. According to the story, McDonald's is planning to capitalize on the public's willingness to pay $4 for a cup of coffee by hiring baristas and dropping espresso machines in 14,000 of their fast-food outlets. Meanwhile, Starbucks, with business lagging, is fighting back with an "if you can't beat 'em, join 'em" strategy, by offering heated breakfast sandwiches and adding drive-thru windows to some of their locations."

Time Magazine 10 Jan 08:
http://www.time.com/time/business/article/0,8599,1702277,00....

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oreo2007 (62.98) Submitted: 1/18/08 10:16 AM

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Yikes SBUX competing with Micky D? Micky D has alot more years of experience and once they get the coffee flavor profile that people want they will sell boat loads of coffee and lattes and everyother coffee drink.

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spencer95 (< 20) Submitted: 1/18/08 6:05 PM

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It's not just about the coffee. It's about the Starbuck's experience. I've never heard anyone say anything about the McD experience -- other than in "Supersize Me". People are more than willing to pay more for comparable products (and the two products will in no way be comparable) if they can get it with better service and a better experience.

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abitarecatania (96.59) Submitted: 1/19/08 3:39 PM

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spencer95,

Welcome to CAPS! What is the 95 for? YOB or a graduation date or? I am glad to see young people engage in investing and putting down the XBOX controllor etc...
"Starbuck's experience"
An experience based on discretionary income and the illusion of wealth in America. Both of which are disappearing as fast as this SBUX stock is falling.

"I've never heard anyone say anything about the McD experience"
There is a reason why McDonalds is one of the most recognized names and most popular franchises in the WORLD. Going to MCD requires no wealth illusion. Just a Happy Meal and playground to wear down the kids... why not get a cup of NEW AND IMPROVED MCD coffee while the kids play?

"People are more than willing to pay more for comparable products (and the two products will in no way be comparable) if they can get it with better service and a better experience."

Replace the "are" with "were" in above sentense. As Americans watch their house, stocks, pension, illusion of wealth, purchasing power, employment opportunities and US dollar FALL, they will realize how easy it is to make coffee at home for $1.00.

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Gtrinvestor (99.96) Submitted: 1/23/08 6:10 PM

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(SBUX) - abitarecatania: SBUX may not go down as much as you think. SBUX coffee = affordable luxury, which people indulge in, even in hard times. You know that during the depression, movie attendance actually grew (at least I saw someone on television say this). How many times have you seen a homeless person buy that pack of Marbolo's he can't afford. I also had a friend go overseas to the Phillipines, and he said that there were shacks all around, yet a line 30 feet long trying to get into the SBUX.
Now that they are experimenting with $1 coffee, the luxury may not be so expensive any more. In addition, this stock is way too beaten up, w/ lots of pessimism already built in. I'm guessing this one beats the S&P from here.

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FleaBagger (99.47) Submitted: 1/26/08 5:00 AM

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That's the best mental image I've gotten from a stock pitch since I stayed up all night reading all of OneStarHero's pitches and blog. About SBUX, I don't know what your price is, but I think it looks good from a valuation standpoint now (below 20).

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abitarecatania (96.59) Submitted: 1/28/08 8:15 AM

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Good reply. I lived in Europe for several years, so I am with you on: "coffee = affordable luxury, which people indulge in, even in hard times."
I also know from living in Europe, how easy it can be to make good coffee. Every "hole in the wall" cafe has to make good coffee or the customers would raise "hell". Seriously, God help you if you gave someone a bad "fix".
My first SBUX underperform pitch:
"How hard is it to make good coffee? Not hard and everyone is going to try. McDs', 7-11, Caribou etc...."
This would be a kiss of death for the Mermaid:
"experimenting with $1 coffee"
3 employees at $20 per hour + the most expensive retail space, bought / leased at the top of real estate bubble. $1 coffee will not pay the rent. I expect there will be hyper competition in the coffee space in the future. Making good coffee is not that difficult and does not require a liquor license etc.....
Americans for decades had to suffer drinking the worst beers in the world. Now we have hyper competition in the beers space. SBUX is to coffee what Sam Adams was to beer.

I do concur with this: "this stock is way too beaten up, w/ lots of pessimism already built in"
I wanted to close my pick, but my Top Bear Pitch is bring humor into the lives of many, who need joy. As the Bear Market does to them, what Ronald and the Gang is doing to the Mermaid.

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floridaoranges (64.19) Submitted: 1/28/08 9:19 AM

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My personal opinion is that, McDonalds and Starbucks would both benefit by creating a partnership. Great distribution channel for the coffee, great partnering ad for McDonalds. It's really not about the coffee anyway. It's about getting people into the stores. Starbucks would benefit with reduced overhead by closing some stores, while expanding distribution and exposure. McDonald's would benefit by selling a breakfast meal to match a great cup of java. Keep in mind, at this price, Starbucks could easily become a takeover target, more so if their stock price sags to $15 or below. In any case, I would accumulate SBUX below $20.

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abitarecatania (96.59) Submitted: 1/28/08 11:02 AM

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Did the Soviets ask for a truce / peace once Stalin's Organs (200 MM) were playing "music" for Berlin?
Did Cesar ask for peace once his legions had crossed the Rubicon?
There will be no peace settlement between these two Arch enemies.
Did Ronald McDonald buy Dairy Queen to make the Blizzard?
Or did he and his army create the McFlurry, to help destroy DQ?
Did Ronald and Gang buy Taco Bell? Or did Ronald create Chipole to destroy menacing Taco Bell Chihuahua? Did Ronald buy Pizza Hut or start making it's own Pizzas... there is but the "scorched earth" policy from the Clown, who knows no limits and holds no boundaries known in modern Franchise warfare.

You make the final plea for mercy of any stock getting crushed:
"Keep in mind, at this price, _________ could easily become a takeover target, more so if their stock price sags"
No, no, young Jedi, I say to you: iacta alea est.
Buy the vulchers or the meat or watch the spectacle form a safe distance is your choice.

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phi16 (99.57) Submitted: 2/10/08 1:38 PM

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Abitarecatania--very funny but this argument doesn't apply to Starbucks. You're describing a different customer entirely. Starbucks isn't loosing those customers because it never had those customers. Besides, McDonalds will regret this experiment. In the early '80's I remember someone defending McDonald's answering the question "Why is the coffee so lousy?" by saying "They don't want college students and retired seniors sitting, nursing a cup of coffee, taking up seats." I believe the same is still true.

I just returned from a trip to Paris and Geneva and I can tell you that the French and Swiss have embraced Starbucks big-time. They have a "New York Bagel" (lox and cream cheese) that puts those sold in New York deli's to shame. From my hotel room, I watched the waterfront Starbuck's packed from morning to night the entire time I was there. Europeans have embraced the "Tea Room" or "Cafe" coffee shop for a century and Starbucks is the latter day version.

Do not bet against this company.

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abitarecatania (96.59) Submitted: 2/13/08 12:09 PM

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You are underestimating Ronald and the Gangs bloodlust. Starbucks did the leg work by renting all these high lease spaces during the peak real estate market and getting people to pay $2-5 for a cup of coffee. Coffee costs about $.10-$.25 to make. Now MCD just has to make good coffee (not hard) and charge people slightly less then they would pay the Mermaid. Meanwhile the Mermaid will begin to struggle to pay all the leases she signed during the real estate peak by selling coffee to a bunch of leverage psuedo "rich" Americans. I am worried to think what girl like that might have to do to pay the bills???

"French and Swiss have embraced Starbucks" - yep, the Mermaid is the "new kid and town".

What did the Eagles say about the new kid in town?
They will never forget you 'til somebody new comes along
Where you been lately? There's a new kid in town
Everybody loves him, don't they?
Now he's holding her, and you're still around
Oh, my, my
There's a new kid in town
just another new kid in town

Ronald and the gang are going to teach the "new kid" in town a lesson.

"In the early '80's I remember someone defending McDonald's answering the question "Why is the coffee so lousy?" by saying "They don't want college students and retired seniors sitting, nursing a cup of coffee, taking up seats." "

In the early '80's I was wearing parachute pants and a mullet. But Ronald and I have adapted with the fashion of the times. MCD now makes decent salads, McFlurries, Chicken McNuggets, Super size and NOW NO super size and created Chipole. I am growing my mullet back, something just stand the test of time.

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oreo2007 (62.98) Submitted: 2/15/08 11:15 AM

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They have had their hey day. I look at it as another dying brand just like CROX. Once people realize they do not need expensive coffee or expensive plastic sandles they will move on to the next best thing. I never really understood the whole $ 5.00 coffee thing or $ 40 bucks for sandles. If I am going to spend my money I will buy 1 dollar Micky dees coffee and give me a good bottle of wine for $ 15 bucks and I can were flip flops for $ 2.00 bucks a pop.

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abitarecatania (96.59) Submitted: 2/15/08 4:04 PM

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CROX is a pump and dump run up by hedge funds. I would not BUY or SHORT this fund playground, because they know how weak this fad stock looks and will run up or run down this stock based on a whim; squeeze shorts or crush long positions. You might be along for the ride, but you would have to be LUCKY to be on the same side as the funds, as the run up or down will come like a torando while you sleep.

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abitarecatania (96.59) Submitted: 2/21/08 11:41 PM

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FYI - Ronald and the gang are laying siege: SBUX is cutting the fat:

Starbucks Corp said on Thursday it would eliminate 600 jobs as it works to cut costs and reignite growth.

The coffee seller has been battered in recent months by slower consumer spending, higher milk and labor costs and concerns that it may have saturated its domestic market.

Shares in Starbucks were down 2.3 percent, or 41 cents, to $17.85 on the Nasdaq.
http://www.huffingtonpost.com/2008/02/21/starbucks-slashes-600-job_n_87869.html

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MN4t9er (< 20) Submitted: 2/26/08 7:29 PM

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Well stated , Oreo .... I need not say more

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QuixoticGuy (64.29) Submitted: 2/28/08 11:39 AM

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The notion that McDonalds could compete with Starbucks in the specialized coffee business is LAUGHABLE.
McDonalds food and drink quality is at the bottom of the barrel.
The reason that Starbucks is an international leader is because there product doesn't suck. Have you actually ever had a half decent cup of drip coffee at any place OTHER than a Starbucks?
Somehow I doubt the McDonalds employees will get the whole Latte thing right. Most likely they'll take it the way that Tim Hortons did and offer "cappucinos" or worse Iced cappucinos (which technically do not and can not exist) and give a person a product that is actually not what it is supposed to be.
Starbucks actually pays their employees a decent wage, they get benefits, they get stock, they get free beverages, free coffee and tea. They also don't have uniforms. Their employees LIKE their jobs.

McDonalds does not.

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AnomaLee (99.49) Submitted: 2/28/08 2:52 PM

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"Have you actually ever had a half decent cup of drip coffee at any place OTHER than a Starbucks?"

Yes, Greenbeans, Cinabon, the Coffee Shop, and in my home....

All the places I listed are growing their clips faster than Starbucks will because they are oversaturated.
When gasoline is $4 a gallon and I have to decide between $4 coffee or buying gas.... The choice becomes very easy.

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abitarecatania (96.59) Submitted: 3/01/08 2:29 AM

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The idea that Ronald will NOT crush the Mermaid is laughable. Have you been to the Ronald created Chipotle? Is Ronald crushing Taco Bell? Yes, he is....

"Have you actually ever had a half decent cup of drip coffee at any place OTHER than a Starbucks?"
Yes, I lived in Italy and every hole in the wall sells good coffee. Or the locals would burn it to the ground.

"Starbucks actually pays their employees a decent wage, they get benefits, they get stock, they get free beverages, free coffee and tea. They also don't have uniforms. Their employees LIKE their jobs."

Yes, she DID...past tense. But now the Starbuck's Mermaid is being held under siege from a totally ruthless gang of franchise warriors. She is having to make cuts in order to survive.

"Their employees LIKE their jobs."
The ones who do not get laid off will have plenty of extra work, covering for their missing baristas. They can be "born again hard", learn to frown and be angry like those that work for Ronald.

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