It’s coffee wars as Starbucks muscles in
This is globalisation packaged carefully, with the ‘Starbucks Experience’ part of the US-based group’s successful marketing formula.
The corporation claims it operates favourable policies for coffee growers as well as having the interest of local communities at heart.
For the 52 weeks ended October 2, 2005, consolidated sales rose to a record €5.4 billion ($6.4bn) from €4.5bn for fiscal 2004.
Sales increased 23% when calculated on a comparative 52-week basis for both fiscal 2005 and 2004.
Net profits rose 27% to €420 million from €331m and it achieved earnings per share of $0.61 compared to $0.47 2004.
“Starbucks’ record results in fiscal 2005 reflect the exciting momentum that we continue to see throughout our business and demonstrate the underlying power of the Starbucks brand,” Starbucks chairman Howard Schultz said.
“We are particularly encouraged by the early success and the continuously expanding development potential of our international business. From opening a record number of new stores, to the ongoing popularity of our core beverage and food items, to enhancing the customer experience through unique offerings in music and consumer products, Starbucks is appealing to a broad and diverse global consumer base.”
In College Green yesterday morning, Starbucks opened another outlet in the Dublin market in its first high-profile move in the capital.
People were queuing not for coffee, as one astute consumer observed, but for the ‘Starbucks’ Experience’. Even his expression echoes the group’s own propaganda.
The arrival of the group in Ireland is ominous. These guys have shown their ability to push through a strategy that works.
Tactically they can be quite ruthless and have been accused of operating pincer movements on existing coffee shops by locating on either side and squeezing them out.
It’s a tough business model and the 10,000 stores set up internationally proves how durable this phenomenon has become. Don’t be fooled by the ‘we love our community’ kind of clap trap.
It has been claimed they set their own ethical standards and comply to them rather than to more objective criteria. Sincere to the point of necessity was how one critic described them.
Their arrival here is a real threat to the O’Briens Sandwich bars and the other players operating in this field in Ireland.
Their decision to set up here is a further endorsement of the state of the economy which is expected to continue to grow at a rate of 4.5% to 5% every year for the next several years.
Starbucks’ strategy is clever and has a commitment to giving the consumer a quality service.
It is difficult to find a metaphor for what this represents for the rest of the players in this expanding market of coffee on-the-go and coffee not-on-the-go.
What looks pretty certain is that Starbucks will not stop at College Green.
Its policy is to expand its presence aggressively and make no mistake, this group takes prisoners.
Companies well established here may need to bear that in mind and look to the standard of service this conglomerate provides. They will need to be on their guard, according to those who have been on the receiving end of this corporation.
CONNECT WITH US TODAY
Be the first to know the latest news and updates
