Monitoring America's favorite drug dealer.

Schultz on his turnaround plan: "I think if I go any faster, I'm going to kill people"

Howard Schultz and Starbucks make the Wall Street Journal's front page. Some highlights:
* The CEO says improvement in the company's performance will take time, and will depend partly on how the now-sluggish U.S. economy does.
* By fall, cafes will have a new food lineup that includes healthier items and something to replace breakfast sandwiches.
* Starbucks will stop selling holiday teddy bears, because they don't fit the brand. (Read the Wall Street Journal story)

Here's an investor who thinks Starbucks should start franchising

"Why not franchise?" asks Todd Sullivan. "It may be a bizarre control thing in Seattle but it works just fantastically for every other multi-location food retailer (yes, that is what you are). Franchise fees alone would add to the bottom line while reducing costs, freeing up money (not for expansion) but for buying back shares or actually giving shareholders a dividend. They deserve something after the last 18 months. Hell, put 10% to 20% of the US stores up for sale to 'master franchisees' and watch the offers come pouring in." I suspect some of you can tell him why franchising will hurt Starbucks.  (Read the istockanalyst.com article)

OPEN THREAD conversation-starters: Ex-Starbucks CEO Donald is named to Rite Aid's board; Starbucks to pay $3 million in mileage reimbursement suit; and store managers will meet in New Orleans this fall

Take your pick -- discuss these items from the past week, or bring up anything else Starbucks-related in the weekend open thread.
> Starbucks to pay $3 million in mileage reimbursement suit
> Former Starbucks CEO Donald joins the Rite Aid board
> Starbucks plans leadership conference in New Orleans

Pike Place Roast gets an OK review from Consumer Reports

Consumer Reports taste-testers found Pike Place Roast to be "a smooth cup of coffee with some bitterness, but not particularly complex." Its conclusion: If you're a confirmed Starbucks drinker and like the taste you're familiar with, this may not be for you. But if you're looking for coffee with a mild, medium-roasted flavor, Pike Place Roast might be the one to try. (Read the Consumer Reports review)

Activist investor who pushes for change discloses big stake in Starbucks

Investor Nelson Peltz has disclosed that he owns 842,000 shares in Starbucks. That news sent Starbucks shares up nearly 3% on Friday. Peltz has been known to push for change at companies he has stakes in. Wendy's, for example, bowed to Peltz's pressure to lower costs and spin off its Tim Hortons chain. (Read the MarketWatch story)

Starbucks considers using biodegradable material instead of plastic to line the inside of its cups

Starbucks reveals in a just release corporate social-responsibility report:
* The company recycled some materials in 2,344 of its company-owned stores in the U.S. and Canada last year -- that's just 32% of its company-owned stores in those countries.
* Last year the company recycled in only 73% of the stores where it controls waste removal, down from 79% in 2006.
* Starbucks works on environmental issues in ways that customers rarely see. Among Fortune 500 companies, it is the ninth leading purchaser of renewable energy certificates. It is testing energy-efficient lighting in several shops. (Read the Seattle Times story)

Who cares when the coffee is "scooped"? It's the roast date that counts.

Jacob Grier picked up a bag of Starbucks beans at 9:30 a.m. Monday, May 12. He later noticed this on the bag: "Freshly roasted on: 5-12-08." What's up here? Grier was told by a former barista that that's when the beans were scooped into the bag, which means absolutely nothing when you're judging freshness. Truth in packaging, please. (Read the JacobGrier.com post)

Starbucks unveils its "+Energy" products in US stores today

The new ingredients can be added to any existing Starbucks handmade beverage by saying "plus energy" at the end of one's order. According to this story, baristas have been trained in how to mix in +Energy, which contains B-vitamins, guarana and ginseng. (Read the Seattle Post-Intelligencer story)

Christian group doesn't have anything better to do than protest Starbucks' logo

A group calling itself The Resistance complains about a new version of Starbucks' logo that the Christians say "features a topless mermaid with her legs spread." They want people to boycott the coffee company because of it. Of course, Resistance will only drive more people -- especially teen boys -- to Starbucks stores to check out this allegedly racy image. What fools! (Read the Huffington Post item)
> "The Starbucks siren is half-fish; she doesn't have legs to spread"

OPEN THREAD conversation-starter: Do you think this barista finished his shift without knowing the Celtics game results?

I doubt it. (Click on the image to read the sign.) People probably shouted the score at him/her, because that's the way they are.  Discuss this sign -- corporate would probably frown on it, but you have to admit it's cute -- or anything else Starbucks-related in the open thread. (Check out "An Extra Bold Request")

Journalist seeks your stories about Howard Schultz

David Margolick, an author and former New York Times and Vanity Fair writer [his Wikipedia entry] who now works for Portfolio (a business magazine), sends this email:

For a story on Howard Schultz and Starbucks, I'd welcome any thoughts, anecdotes, comments, or insights about Howard or accounts of personal experiences with him. All responses will be kept confidential. Please contact me at margolick@aol.com. Thanks.

               David Margolick
               Conde Nast Portfolio

Ousted Starbucks CEO Donald agreed not to work for McDonald's or Dunkin' Donuts

Although no longer working for Starbucks, Jim Donald will still get paid $1.25 million this year as long as he sticks to his pledge not to work for McDonald's or Dunkin' Donuts -- or not badmouth his former employer. Launi Skinner, former president of Starbucks' U.S. operations, also signed confidentiality and noncompetition agreements when she left in March. She received a full year's salary, and a Starbucks Partner Card entitling her to merchandise discounts for life. (Read the Seattle Times story)

Starbucks employees at Seattle HQ compete in Ambassador Cup

Eleven people from different departments competed in the coffee expertise contest. (Read the Seattle Times story || The trivia quiz questions)

Five hurt when car plows into Starbucks in Bellingham, Wash.

In the aftermath, the inside of the Starbucks store was strewn with chunks of glass, upended furniture, spilled coffee and drops of blood. Customer Ingrid Martens says the crash sounded like an explosion. "It picked up a couple of people in their chairs and just threw them against the wall. Luckily, nobody was under the car … It was kind of miraculous." (Read the Bellingham Herald story || View photos of the crash scene)

Columnist wants Starbucks to give him a slice of lemon with his tea

From Al Lewis' screed:

Go almost anywhere else, order tea, and they've got lemon. But not at Starbucks, where both hot and cold tea sell for a premium.
"May I have lemon?" I asked a Starbucks barista Monday.
"No," came the reply. "Sorry."
"How can you sell iced tea without lemon?" I asked.
"I don't know," the barista said. "Do you want your receipt?" (Read the Denver Post column)

A reader asks: Why are "great leaders" leaving Starbucks?

A Starbucks Gossip reader writes: "How about a discussion about great leaders like Gregg Johnson and why they are leaving the company? This guy did more to build the culture, develop our partners, make our stores run better (with programs he led like "Simplify Our Stores"), and personally mentored scores of partners...other than Dave O and HB, I can't think of another Starbucks executive who more embodied the mission, values, and guiding principles of Starbucks.

"How could Howard and the "dream team" let him go?  Did they even try to keep him? What about launi, sheri, stanley, and the other great leaders who have walked out the door in the past two months?  Is there going to be anyone left who cares about store managers and baristas?"

STARBUCKS MEMO REGARDING GREGG JOHNSON

From: Partner Communications
Sent: Thursday, May 01, 2008 10:22 AM
To: Starbucks Coffee Trading Company; DL - Field Offices (Intl); DL - GC - All Partner non CW and PSP - Canada; DL - GC - All Partner non CW and PSP - US; DL - GC - VP And Above - International
Subject: Organizational Announcement: Thank you, Gregg Johnson

Thank you, Gregg Johnson

It is with regret that I announce that Gregg Johnson, senior vice president, Global Business Systems Solutions (GBSS), has made the personal decision to leave Starbucks. His last day with the company will be Friday, May 2.

Gregg has been a Starbucks partner for almost 13 years. During his tenure, he served in a number of business leadership roles, including vice president, Southwest Zone; senior vice president, Licensed Stores; senior vice president, U.S. Stores; and senior vice president, Emerging Businesses. Since 2005, Gregg has been co-leading the GBSS program with Karen Metro, vice president, GBSS.

Gregg is known for his strong leadership skills and has served as a mentor to numerous Starbucks partners. Please join me in thanking Gregg for his contributions to Starbucks. We wish him all the best in his future endeavors.

OPEN THREAD conversation-starter: What do you think of a writer's claim that Starbucks has become a 2008 version of the Gap?

The Gap hit a critical mass a decade ago and competitors had caught on to its strategies. With that, customers didn't find the store as exciting as they once did. "The same, presumably, could be said of Starbucks," writes Merek Fuchs. He questions Howard Schultz's excuses for the company's slowdown. (Starbucks has gotten too big and has more competition, he says.) Discuss this story or anything else Starbucks-related in the open thread.

Read the transcript of Wednesday's Starbucks earnings call

Some quotes from Howard Schultz:
* "Our food transformation begins with the launch of new, nutritious breakfast foods in September, continues with the replacement of our current breakfast sandwiches in the early part of Q1, and will be followed by the roll-out of a new, higher-quality, proprietary bakery and chilled foods program."
* "Clover is being very well received in our two test markets and we believe it provides another significant opportunity to differentiate the Starbucks Experience from all others. [Memo to Howard -- I was in St. Paul, MN last weekend and had Clover coffees at Kopplin's Coffeehouse; I couldn't get a Clover at Starbucks in the Twin Cities. So much for differentiation.] Our current plans are to bring the Clover experience to customers in more than 80 of our U.S. company-operated stores in Seattle, Boston and San Francisco by the end of the calendar year."
* "We know that we've got negative traffic. We are not accustomed to that. We're not happy with it. This is a management team in a company that is used to winning and we are built for that and we want to do that again." (Read the full transcript)

Starbucks says second quarter earnings were down 28%

For the 13-week period ended March 30, 2008, net earnings totaled $108.7 million versus $150.8 million for the same period a year ago, a decline of 28%. Earnings per share (EPS) for the quarter was $0.15, down 21% from the $0.19 per share earned in the prior year period. ALSO: Starbucks plans to open significantly fewer new stores in the U.S., over the 2009 to 2011 period, to less than 400 net new stores per year, opening approximately 250 company-operated stores in each of the three years. (Read the press release || Brief AP story)

Starbucks to unveil two new drinks today, including a smoothie-like beverage

The two lines of drinks -- a smoothie-like beverage made of fresh fruit and whey powder, and another sweet, icy drink -- come as the company says it's in the initial stage of a broader push into healthier drink and food products. Flavors the coffee chain has developed include chocolate banana and orange mango. While the fruit drink will be available in all U.S. shops, the icy beverage, developed with an Italian company, will be sold only in select areas like Southern California. (Read the Reuters story)
> Earlier: Starbucks tests sales of protein smoothies at Seattle stores