Starbucks Corp (SBUX)

ClovisLorax (22.60) Submitted: 4/30/08 6:25 PM

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Starbuck's has the brand name recognition. It won't matter if they're selling tea or coffee. Starbuck's can change the atmosphere to match different cultures, too.
Haven't you seen all of the silly flavors of Coke they have all over the world. We won't drink them here, but they sell them in other places. Brand name carries a lot of weight. Starbuck's will pull their head out, figure out what's going on, and eventually make huge gains.
At these prices, it's a good long-term investment.

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AnomaLee (99.84) Submitted: 5/02/08 3:24 AM

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It took KFC two decades before they got it right in China... The success of YUM was long in the making. It's not as if Starbucks can copy KFC's model of success. You must not be aware of U.S. companies and how they're perceived differently abroad.

Starbucks isn't that great of a stock, and this is my second time thumbing this stupid stock down, so let me say again that Starbucks will learn like Coke and Pepsi did decades ago that their real competition in selling coffee is not other companies that sell coffee but rather companies that sell any kind of beverage: (water, beer, sports drink, tea, juice, etc...)

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JustWokeUp (72.97) Submitted: 5/05/08 11:46 PM

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Wealth distributions in many of the Asian countries do not follow the standard American or European 'normal' distribution. Instead, they are very bi-modal. Hence, Starbuck's does not need to worry about the fact that a very large number of people here are starving, because the opposite is also true (i.e. very large number of people with Jaguars, BMWs, LV bags, and what-have-yous.. people with a very strong buying power). Do come and visit us in Jakarta, Tokyo, Shanghai, Beijing, Hong Kong, Taiwan if you don't believe me.

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DuncanMF (< 20) Submitted: 5/08/08 8:54 AM

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"They drink tea and not coffee in Europe" - try telling that to an Italian (or a German, Frenchman etc). Starbucks can work in the land that invented the cappucino, but needs to be marketed right, to go up against the local and very popular cafes and existing chains.

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AnomaLee (99.84) Submitted: 5/09/08 11:05 AM

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When you're setting up a lemonade stand in the neighborhood you have to know the neighbors....

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rockt (< 20) Submitted: 5/12/08 6:53 PM

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Tell that to McDonalds or Coke (or Burger King, Pepsi, Intel, Dell, IBM, Google, Facebook, Nike, KFC, Pizza Hut...) You Americans seem to have an understanding of globalisation (yes, that's an s not a z!!), I don't know why it's taking all these comments from us non-US folk to remind you!

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AnomaLee (99.84) Submitted: 5/13/08 1:22 PM

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Yea, well I've been bearish on Starbucks for over 20 months now. Both McDonalds and Burger King have outperformed Starbucks, and neither stock has been cut in half since....

Nice try... How long have you been bullish? The problem is SBUX menu isn't full of foods with saturated fats. No they were too busy selling John Denver CD's... There's only one thing saturated about SBUX and that is their menu of stores.

SBUX near 52-wk lows and it's going to make a new 52k-wk low when it hits the $13 range. Then and only then will review this pick and look at this crappy stock again to see if they closed enough stores...

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FreundInvesting (99.91) Submitted: 5/16/08 11:09 AM

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Agree 100% AnomaLee. Thanks for the info!

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FleaBagger (99.66) Submitted: 5/21/08 11:01 AM

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This is pretty ridiculous, except for the increasing costs part. And the John Denver CD knock. Those were true. But the examples of MCD, KO, etc. provide a reason to buy SBUX, because, like it or not, the well-to-do of other countries want American products and brands. Perhaps you've heard the anecdote that McDonald's in other countries is like Ruby Tuesday's is here. And that is fancy for countries that are just discovering the concept of a middle class. It could be the same with Starbucks, and I can think of no reason it shouldn't be. As for saturated fat, they have plenty of experience selling muffins and such that are chock-full of saturated fat. Don't you remember? They could probably pretty easily bring them back for foreign markets. People in Europe drink at least as much coffee as Americans do. And Starbucks is cheap enough to buy for minimal growth, anyway. Your pick is wrong to the tune of way wrong.

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WilliamCrook2007 (68.95) Submitted: 5/24/08 11:59 AM

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You are incorrect on this because I am married to a lady from the Philippines, she told me Starbucks is very popular in her country and she knows many of her friends and friends of friends drink coffee in Starbucks coffee houses. My wifes mother told me people mostly drink tea in her country when people are feeling sick, whilst people in her country drank coffee on a regular basis.

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WilliamCrook2007 (68.95) Submitted: 5/24/08 12:04 PM

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It says in numerous comments on here Europeans do not drink coffee, well I have to say this is total rubbish balderdash. I was born and raised in Europe. I love coffee I know there are as many coffee drinkers as there are tea drinkers in Europe, I should know I am European.

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AnomaLee (99.84) Submitted: 5/27/08 7:41 PM

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"You are incorrect on this because I am married to a lady from the Philippines, she told me Starbucks is very popular in her country and she knows many of her friends and friends of friends drink coffee in Starbucks coffee houses."

That's interesting because my mother was born and raised in the Philippines and I don't remember my mother buying coffee for me as a kid. It wasn't until I was older and she realized I was completely Americanized that my mom would ask if I wanted her to make coffee for me.

Also, I'm going off my own experiences and the experiences of other companies. I have a cousin that works at McDonalds in Manila, and I was deployed to Iraq last year. During the time I traveled to Kuwait and Qataar I saw a boatload of Greenbean Coffee shops, but there were few Starbucks. When I found one I was so happy, but when I walked in the atmosphere just didn't feel right -- an amazon setting doesn't fit very well in a desert environment.

I am telling you that they have too many Starbucks in the United States and you can't count on international exposure to carry this stock higher anytime soon. I saw Starbucks pop up near several military bases in terrible real estate locations, and I'm sure this has become a larger problem over the past several years. I was bullish on Starbucks for about 8-9 years [before I was able to buy stocks] but I don't think it's a good buy today.

I don't have a skeptic charm. This isn't one of my massive red thumbs. I'm not thumbing down this stock to collect a lot of points but hopefully to keep people from being so overly bullish on the stock. That is the ultimate point of CAPs. Now, I did that once with AINV last year and it turned out well, and if you listened to me when I thumbed this stock down before you would've done better for yourself. I can't emphasize enough that just because Starbucks is an American Staple it does not mean it is a great investment. This isn't Berkshire Hathaway --- Hell, this stock isn't even McDonalds or YUM! Brands.

However, it's your money and it's your portfolio so you all can do whatever the hell you want. This is my last reply to this. Somebody has to trade the stock anyway so good luck.

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Kinance (27.15) Submitted: 5/29/08 5:21 PM

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People will pay for overpriced coffee everywhere in the world its a obsession and they're addicted to it. Around the world people think it is American, and so cool to buy and carry Starbucks coffee. They don't even know why they do it. Even Americans do it without knowing it. They think its awesome to carry around a paper cup that has the Starbucks logo on it. Makes them feel better doesn't matter if its 5 or 6 dollars a cup. Why do you spend 4 dollars a gallon at the pump when there are other methods to travel like biking or busing? Because you feel a lot better driving, saves you time and makes life easier for you correct? Well there are people willing to spend extra money just to carry around a Starbucks drink. Walk around a Starbucks store it is still so popular. The price might not go back to 30 anytime soon but it will go up for sure and not down to nothing.

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boredgenius (80.54) Submitted: 5/30/08 11:56 AM

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Yes, Starbucks is very popular in Philippines (2004 onwards).

It has become the GO-TO destination for all things impt (and not impt).. Meetings, friend meetups, dates, after dinner, hang-outs, etc.

The same thing is true in Singapore, Malaysia, and Indonesia.

The only thing is that in these countries, people expect to STAY for atleast 30 minutes inside Starbucks.. They are there to be with people, after all.

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Nihonjin (< 20) Submitted: 6/05/08 5:38 AM

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Agree with some of the points above given the current crisis in food prices but you only have to look around in several countries in Asia (China, Japan, Thailand...) to see the impact that Starbucks is having on what I agree are traditionally tea drinking populations. There are also a very large number of 'new middle classs' in many of these developing countries who are more than happy to pay $4 for the "Starbucks experience"

It is for that reason that I think that their international growth has far to go. They have 1st mover advantage and are converting a huge population base to try something new and trendy.

Growth in the US may be stagnant but there is a way to go in Asia in particular.


- Asia resident.

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milehighfooling (30.16) Submitted: 6/05/08 11:24 AM

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Having been to England, Scottland, France and Italy and seeing 2-3 Starbucks locations within the same block in the larger cities, I do not see how you can possibly state that Europeans do not drink coffee. These stores were always bustling. I can not stand to drink coffee personally (do love the aroma though, go figure) but, personal observations indicate a different picture to me. Asia will be no different in my mind. Even if only 1 in 50 start drinking coffee regularly, that is a huge customer base. It may not start tomorrow, but it will start in the next few years.

As for the budgetary/cost concerns, in the US there will be a few customers that eliminate the expense from their budgets and some will reduce the amount they drink but their core demographic will likely not change at all. The bigger impacts in my mind is the impact of increased costs to the bottom line (short term) and the management of re-focusing the company (long term). Internationally, US product should be getting cheaper not more expensive for the target market.

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