Starbucks profits dive by 97%

[Bob Dalek]

It costs thousands and thousands to rent a shop on a popular street, plus thousands and thousands even for cheap staff. They are no more expensive than Nero or other places anyway are they?

I know there will be exceptions, but I always find the high street brand coffee shops to be clean and not smell too strongly of old mops and backroom ciggies.

[AtW]

It costs thousands and thousands to rent a shop on a popular street, plus thousands and thousands even for cheap staff. They are no more expensive than Nero or other places anyway are they?

Have you asked yourself why so many coffee shops appeared all around the world? Same with mobile phone retailers. The reason is ridiculous markup that they make.

I've seen plenty of news shops next to Starbucks selling newspapers, sweets and lots of other things for reasonable prices (ok more than supermarket but not by much), their rent is surely the same yet they don't charge exorbitant prices.

There are too many of those shops around - it goes against economic common sense and was only made possible because of the "good decade" when people were buying all sort of junk without checking value of the products and services they bought for their money. Now thats changing and Starbucks is losing money big time.

[expat]

There are too many of those shops around - it goes against economic common sense and was only made possible because of the "good decade" when people were buying all sort of junk without checking value of the products and services they bought for their money. Now thats changing and Starbucks is losing money big time.

I agree with that. With a false sense of wealth, people were prepared to spend a lot of money on buying a brand. That's what Starbucks is: most of the price, and most of the attraction, is not the coffee but the brand.