Posted by R.K. Gella
America’s gourmet coffee industry is indeed in necessity of a bailout although it’s implausible to imagine congress stepping in to rescue the floundering Starbucks.
The company’s concern turns to next year where projections remain bleak. Sales for the next fiscal quarter are expected to decline for all established stores.
Starbucks has been hit hard by the economic slowdown with demand for the firm’s premium priced coffee falling across the US. In the 2008 fiscal year the firm recorded its first ever quarterly decline in store traffic and over the course of the year comparable store sales fell by 5%, with results getting progressively worse throughout the year.
Earlier this year the company announced plans to close up to 600 stores nationwide, cutting 1,000 corporate jobs and up to 2,000 café positions. Then this month Starbucks reported it could save 200 million dollars through its cost trimming efforts.
It’s speculative whether these moves will get the troubled chain through. As shares drop and stores close, the long-time coffee juggernaut can only hope to hold on.