Starbucks shares rise after analyst expresses confidence in the company

An Oppenheimer & Co. analyst says he now has more confidence in the ability of Starbucks to fight sliding sales by cutting costs and getting its core customers to spend more. The analyst claims oatmeal has been selling well in its first week in stores, and that new smoothie-style Vivanno drinks and frozen yogurt are also performing well. Analyst is confident in a Starbucks turnaroud

Comments

[truth]

Three analysts currently have 'buy' ratings on Fannie Mae and Freddie Mac, who essentially went out of business two weeks ago.

Means nothing.

[yeah, sure]

I'm surprised.

In my store Vivanno sales went down dramatically since the weather isn't extremely hot anymore. Lots of people started to complain about the protein powder causing them to blow holes in their pants as well. So all these people started to cut back on the Vivanno. We probably sell about ten a day now, while it was about 50 within the first few weeks.

And Oatmeal? I've worked about 35 hours since it started and didn't sell a single one. Vanilla Protein Latte? I sold two. One of the customers had me to remake it without the powder.

Oh and signature hot chocolate. I'm really looking forward to it. But unfortunately the launch will be a disaster in my store, since not even the store manager was able to tell us exactly how it is supposed to be prepared. Especially the way of customization...
I'm still happy I never bought a single stock.

But of course I do like the positive news. Even so I can not second them from my perspective.

Keep up the good work.
Onward!
H.

[Torontodude]

I think the analyst is on to something. I'm certainly spending more at Starbucks since the egg, spinach and feta wraps were added. And see more people buying with food items.

But oatmeal a big seller? Where? Does anyone work in a store where oatmeal has been a hit?

[Ken]

I have a few friends that work at Starbucks here in Arizona. One is a manager, and she told me the other day she has sold a "handful" since the release. Honestly, I don't think anyone wants hot oatmeal when its already 85 degrees at 8am.
I would expect them to sell well for the first few weeks, people trying it out and stuff, but its not the easiest breakast item, or the best imo.

[cupajoe]

Toronto dude, You sound like the definition of a true pessimist. I have been buying this stock for the last fifteen years, and although lately the company is struggling you need to expand your horizons "a little" and start to think worldwide. Store closures nationwide in the states for non profitable stores, makes sense, right? Worldwide expansion where Starbucks hasn't even begun to make a presence, i.e., CHINA, makes sense, right? You are so focused on Vivanno sales or what you think about oatmeal. Actually, the oatmeal is fantastic. And to answer Ken, who says "who would eat oatmeal if it is already 85 degrees out", the answer is "everybody who chooses to be healthy!!" I would eat oatmeal for breakfast, lunch, or dinner no matter what the temp. And I will pay for someone to make it for me.

Analysts have become positive on the stock because the direction of the company is finally headed forward again. Maybe all those pessimists out there should reevaluate there own personal life and find something to make you happy, maybe then you would walk in to your store with a better attitude. If you don't want to be there, find a new job, or at least find something positive in something! Remember, your attitude rubs off on others!!

[cupajoe]

Sorry Toronto Dude, the last post was meant for "yeah, sure."

[inopethflames]

starbucks always needs to have their reward card features and only expand them, not get rid of them. also the drink before 2pm then $2 after that is a good idea also, ive done that 2-3 times where before id never gone to starbucks twice in one day. if they would just get a few more latte flavors like always having banana coconut along with 2-3 more, then they would be in good shape.

when does the hot chocolate come out?

Supposedly the bux spends more on health insurance than on anything else. Howard invested a huge amount in Pinkberry. But Pinkberry doesn't offer health insurance to its retail hourly workers. IS THIS HYPOCRITICAL OR IS IT JUST ME??

[Ken]

cupajoe
You really think we people here in America, I beleive the second fattest country in the world (if not the first) are just chomping at the bit for good old fashion, yummy oatmeal? I guess that is why you see sooooo many healthy options now a days. The only reason McDonalds and Burger King and the likes offer healthy choices, is becuase 5% of the population bitched about it. the bottom line is, healthy doesn't really sell in a fast food envirment, and I'm sorry, but starbucks is fast food.
People don't want healthy, they would rather have cheap and tasty.

[spence]

For the record, (not that anyone really cares,) I thought the oatmeal was just dumb. Then I tasted it.

I sample it with 1 pack brown sugar and dried fruit and I'm selling a lot of it. And it's still very hot here in Georgia. I can't wait until December. It's going to be a huge seller.

[Coffee Soldier]

The oatmeal is selling fantastic at my store but today it was 40 degrees in the early a.m. here in New England. We've been sampling the ten packs a day and more and more customers are buying each morning. I think the colder the weather gets the better it will sell...Maybe Sbux rolled it out a little bit early to iron out any wrinkles?? Or maybe they should have thought about putting the oatmeal out seasonally or only in markets that get cold to make it special for that area sort of like the old Maple Latte.

Oatmeal is doing well in my part of Florida, and its 90 degrees at 5AM in the morning. I believe the "sell" has to do more with the partner's selling abilities than external factors such as weather. It has always been my philosophy; therefore, I have for the most part seen success with suggestive selling.

[cupajoe]

Ken,
Us folks here in Seattle, world headquarters for the "buck", are looking for healthy alternatives. I haven't been to a Mcdonalds in ten years, however I go to a Starbucks 25 times a month!! Yeah, we are chomping at the bit to make our life just a little bit better here, maybe the "buck", and us folks in Seattle, are on to something.

[waASM]

There is not a single partner in my store that isn't on board with oatmeal. They were given lots of free samples before the launch, and are now buying it every morning before work. I see partners eating it every day that I'm in the store. Therefore, the sales in return have been also been good. The customer buys what the partners buy. And if you can get your partners to buy into anything, then expect the customers to lap it up as well. It's that easy.

[Posted by:]

Here in Texas the oatmeal is selling quite well. For those of you who say oatmeal is not selling well, I bet it's due to your bad attitude. You think its ridiculous and that rubs off on the customers. So, no wonder it's not selling in your stores!!!

[AliCat]

We sold almost 40 oatmeals today.

Wanna talk about a flop? The protein latte.

[The ASM]

GO AliCat and Team!!!!

Our daily target is a mere 7 oatmeals, however I really talked it up to our partners and sampled it out ALOT and then boom we started selling a good 20 or so a day! That goes to show, sampling is key to driving business.

[Ephlan]

we sold 30 oatmeal yesterday and our goal is 20. it was hard selling it the first week but now we sell 25 a day no problem. I would really like to get my hands on the person who thought the protien latte was a good idea though. our goal for the week is 17 and we have only sold 5 this month. (3 were returned.) anybody ready for chantico part 2?

[Posted By:]

I totally agree about the protein latte. Not a good idea. Huge flop. I work the evening shift, usually, so I get to see the numbers at the end of the night. I believe we have sold around 2 protein lattes thus far. What a disappointment! They need to take the protein latte off the menu for the second half of the fall promotions. I mean, completely off the menu. Pretend it never existed!

But, I guess it won't matter anyway. Signature hot chocolates will be our new focus. Anyone else really excited about this? I can't wait to try the salted caramel signature hot chocolate!

[Deusx]

Frankly, the thought of those protein lattes gags me a bit. I think Howard should have to drink one of everything he wants us to sell instead of just listening to some corporate dink who is so out of touch with the partners and consumers that they think sludgy chocolate tar would be fun to drink. "But it tested so well!" *eye roll*

[Badeddie]

The price has gone up?
Has anybody been tracking this? Seriously, the stock is depressed and will stay depressed.
Read the article and you will see that the analyst talked with upper management. I think he should be talking with customers and baristas to get a feel for where the company is.
How about a thread discussing "our core"?
And I'm not talking about coffee.
What made the company scads of money?
The people!
Our partners are our core, and someone needs to really focus on this because morale is pretty bad right now.
"Create a great work environment..."
It doesn't matter what we sell, or what our focus of the moment is, the job tasks remain the same.
The focus has changed to generating revenue! Last time I looked, this is the last of the Guiding Principles.
Focus on what got the company there.
Hedgehog concept.
"We're not in the coffee business serving customers, we're in the customer service business serving coffee."
Anybody remember that? Who said that?
I would love to hear some opinions.

[Rudigar]

Well I check the stock market almost daily and over an entire year
Starbucks has declined. Even today it's down 0.24. The protein latte is a laxative in a cup. The vivanno plays havoc on my colon. The oatmeal is a good option but people are only asking for it if they are allergic from everything in the pastry. For those nutty customers I suggest Gazebo blend and a classic coffee cake.

[Will]

Vanilla Protein Latte may have been a "flop," but it didn't really cost much. Didn't have to develop a new syrup, very little promotional materials, etc...

But we'll see the long term effect on steam wand repairs...

[msbarista]

For those of you constantly whining that a product is a dud because it doesn't sell in your store, remember two things:
One, there are 5,999+ other stores. Your store is not the key indicator of what sells overall. Even if a product is not selling well in California or Arizona, it may be selling like crazy in other parts of the country.
Two, what are YOU doing to help sell it. If people are complaining about the protein powder, remind them they can order a Vivano without it. Not selling oatmeal? How many have YOU sampled in that 35 hours you've been working? Are you selling or just ringing up customers on the register?

To Badeddie - analysts care about one thing - the bottom line now and projected. They would never talk to partners, that's not the focus. I'm sorry if morale is bad in your store. I think a lot of morale problems have to do with the fact that Starbucks is just another "job" to most people. Good morale is a very hard thing to find. No matter how great a place to work, there will always be people who don't think so and will complain like crazy because it doesn't hold up to some ideal they have.

[P.R.I.D.E.]

It makes me smile to see a fresh flush of new partners who are excited and energetic, because it make me leaving bittersweet...

Yes, I have resigned and will be moving on shortly. I have loved the years I have spent with the 'Bux, and will never forget them. I feel like through the good times and bad, it was the people who made the difference in my daily life.

Unfortunately, a lot of our people are misguided right now. But you strip away the pressure and bad decisions and stress, they're still good people. I suppose it's just circumstance that is causing people to manage differently these days.

And as my manager manages differently, I know it's because her own hands are strapped and she is not enjoying it any more than I was not enjoying it. I could see it in her eyes- as she asked me to jump the new hoops, she didn't believe herself (though she never verbally let on). And that can make the difference at the end of the day.

Thanks for all for the encouragement and support. I wish you all the best of luck.

[yeah, sure]

msbarista, I'd love to sample much more than I do. Unfortunately we are always understaffed. I'm trying to serve customers as fast as I can, restock what needs to be restocked to be able to sell it, wipe clean what ever needs to be cleaned frequently during the day so customers don't think our store looks filthy. I brew coffee constantly, so sometimes I try to do one of the tasks while serving a customer. Where on earth shall I find some time to prepare a sample and go out and sample it? "Excuse me, I couldn't prepare your grande latte in the last 8 minutes because I was sampling oatmeal and Vivannos. What was it again? Nonfat? Would you mind if I make it a venti to make up for the delay? Thank you sooo much for your patience. I hope you enjoyed your sample while waiting..."
This would be about the time most of our customers would shoot me.
Well, of course there is some time in the evening when we have time to do samples. Unfortunately, at this time there are no customers around to sample it to.

Give me more labour and I will do whatever I'm asked to do. But I can't do work for three. And I'm not even willing to work for two while my pay isn't enough for one. And instead of getting some (e.g. verbal) motivation I'm getting told I'm not working hard enough. This was told to me on the floor while brewing coffee inbetween the wait time for milk beeing steamed, shots being pulled, a frappuccino beeing blended and greating the next customer... Oh well, I guess I really should conxider a carreer change. Or at least a store change. Unfortunately it's getting harder to find good store managers, since all the good ones seem to be in the process of leaving... Guess why? They aren't unfriendly and pushy by choice, they are forced, too.

thanks for listening
rant over
:-)

[Wholahay]

Wow...you're a ray of sunshine. Your store is lucky to have you.

[yeah, sure]

I'm sorry to hear starbucks is losing someone like P.R.I.D.E.
I hope you will have luck with your next step. I wish you all the best.

Basically you offered the same reasons I was trying to get across. There is no more fun left. Only pressure. Everyone is very tense instead of relaxed. On ALL levels.

[ppag]

Starbucks is trying to kill me

Starbucks puts sugar in their iced coffee (20g in a 16 oz iced coffee), they of course don't tell you this and since I am a type 2 diabetic this could have a serious effect on my well being to say nothing of my weight.

[Herman M]

The recipe calls for it, as does the recipe for iced tea. Because the recipe for iced coffee or tea includes sugar doesn't mean you are compelled to get it that way. I regularly order both and two words "unsweetened, please" always ensure I get to tase my beverage, not sugar syrup. I am not trying to trash you, rather remind you that anyone with any health or dietary concern should always be proactive in any restaurant setting. The person preparing your food/drink cannot possibly know you have a health or dietary concern. Unless, of course, you wear a shirt or hat proclaiming it. ;-)

[Me]

Hey, it's Friday night and no weekend open thread in sight. Webmaster are you allright? Or have you had a sugar accident?

I really think we should change the recipe and make unsweetend our default. We can still add syrup upon request.
In my store we already ask every single customer if they would like it sweetened or unsweetened. Sometimes they get asked several times, at the register, by the floater and by the barista preparing the drink as well...

[ICLover]

@ppag and Herman, I hear you. In our store, we always ask if people would like the iced coffee/tea sweetened. Other stores do not, even in our district. I know the rule is to automatically sweeten, but my Mom's a type II diabetic so perhaps that's why I'm sensitive to it and always ask. I saw one new-to-our-store partner automatically adding it and politely stopped her, noting that customers here assume it will not be sweetened. When I see customers adding artificial stuff at the condiment bar, I also let them know we'd be happy to add it first for them.

[energybolt]

It truly is disheartening to see sooo much experience disappearing from Starbucks...these partners will be missed each and everyday in our stores!

[Darleen]

Pride,
I wondered how long it would take, I'm sorry that you feel it is time to move on. I know this was not an easy decision for you. Hpward, do you see the most passionate people leaving? Or, are you thinking it's the ones who couldn't cut it? Why are you not fighting for your partners?

[Torontodude]

Without repeating yet again my rant about the evils of sugar...

...let me just agree with the previous posters that Starbucks should make "no sugar" the defualt in iced coffee.

Now that Starbucks offers healthier options, it's hard to justify the disconnect of shoveling nearly three tablespoons of sugar into the drinks of unsuspecting customers.

[Marcus]

I was surprised to at the coffee in the iced coffee drink. They were sampling it once and it was all I could do not to spit it out. I'm just not used to sugar in my coffee and was expecting to taste coffee.

I'm not diabetic like the other poster, but I agree it's confusing. It seems like when you have the words "iced coffee" it doesn't suggest anything other than coffee that has been iced.

Anyhow glad to hear Starbucks doing well, sorry to hear how rotten they treat you baristas. I too work for a company that's often mean and saber rattling.

I liked the oatmeal. Just because they are making new healthier foods with real ingredients doesn't mean that need to stop making indulgent foods. Like if you look at the ingredient list for basically everything in their pastry case except for the new healthy choices, it's basically franken-food. I don't get why they don't push for real ingredients in indulgent foods. Why the heck don't they sell their chocolate bars for example? Or make some fresh baked croissants. They could come frozen and you all proof them over night to bake in the morning. I like indulgences made with real things like chocolate and butter and real grains and fruits. Or how about some really good cinnamon rolls. I don't mind if an indulgence has fat and calories--I just don't like the fake stuff that doesn't even taste good enough for all the calories it has.

[CD]

I believe that SBUX adds the sugar (Classic Syrup) to their recipes for Iced Tea and Iced Coffee so that they can charge more. I always get mine unsweetened and am paying the same price as the customer who gets with the syrup. I wonder how many of their customers actually pay the premium price but don't actually use a syrup...

Perhaps SBUX could find a happy medium where registered card users would get their Iced Teas and Iced Coffees minus a syrup charge (considering syrups are free for registered card holders).

[CD]

Darleen,
EXACTLY!

P.R.I.D.E.,
I am sorry to see you go.

Howard,
FOCUS ON YOUR PEOPLE!

[spence]

I'm boring my husband so I'm refraining from telling him.

I love working at starbucks. I've been there over a year and the novelty doesn't wear off. If it's a crazy day with no breaks, I still don't leave with a headache, I leave with a cappucino. Life is good.

But, hey corporate, if you read this: Seriously, we are so underpaid.

Love ya anyway.

spence

[truth]

But you people keep forgetting the basic fact: They WANT you to leave. They budgeted for high levels of attrition. It beats having to pay severance.

There's a better world out there.

[NERVOUSSM]

To echo the the thoughts of P.R.I.D.E. After the annual review process for managers I have to say that the pressure is on us to produce. I knwo its a job, but it's just not fun anymore. It is very disheartening to find out that whatever you or your team might do well, if the numbers and growth do not show up on the page at the end of the day, month, or quarter, you are not doing your job well enough. This is not the Starbucks I grew up with. We all know that these are difficult financial times for everyone, but we are losing a lot of really great people because of the way they are being treated by senior management.

I truly hope we can turn this around and make it a privilege again to work for Starbucks while getting back to our core.

[PhillySM]

C'mon people! They want you to leave? Really? Is that why they're rolling out a new pay program? Is that way we pay a ridiculously low amount for monthly benefits? Is that why we are rolling out new scheduling standards (optimum scheduling)? Get over yourself. If you don't want to work for a company which is going through hard times (which about 80% of all companies do at one point) than leave. If you believe that you can make a difference and help out, then stay.
If you're really that upset with what is happening in your store call your DM and keep calling them until they call you back. If they don't call you back, call your RDO. Then call Partner Resources. Or call another manager down the street.
There are great managers left at Starbucks. Come work in my store one day and look at the happy faces behind the counters. Granted, we're never understaffed or have less people on the floor than we should, that makes a huge difference in stress level.
And by the way, us good managers are trying to get rid of the bad managers every day. I tell my DM about any incidents in other stores (like being verbally abusive to partners, scheduling partners out of their agreed upon availability, etc.). I get frustrated more about store managers not doing their job and further eroding the value of Starbucks than anything. When you really think about it those are the people that have the most impact- so get out from behind the desk you sit at four all five shifts and see what is really going on in your store!

[BIGDAVE]

I could care less what Oppenhiemer has to say. They are about getting you to invest your hard earned dollars....and worry about the truth a little later down the road if at all. The truth is SBUX has lost half it's value the last year. Cardboard is cardboard. A few Yuppie health drinks and some oats aren't going to bring back the twelve billion dollars that grew feet and walked out of Howie's pocket. I said it last week and I'll say it again this week. If you are going to try and ride P.C. health fads...just bring a trough of oats and a water hose in the store and let the customers that are in to show and tell just graze. One thing that has happened to SBUX is a loss of credibility. Rational people stopped and took a hard look at the place and said"These are a bunch of deadbeats!" The 401k pension plan with the one per cent match is lunacy. Poor health benefits with outragious copayments and deductables are another.The hype about the second or seventh best place to work in the USA has worn out. It really isn't that good of a place to work...especially if you are a part timer going to college.Very few these days actually can afford the benefits package on the chump chnge SBUX pays part timers.Many have found the core value statements are just a bunch of motivational BS that doesn't really apply to the corporate side of things. The green book cards and other trash collections are just worthless pieces of paper in lieu of a bonus or getting Howie to split with his money. It has come to pass that people are actually growing up and saying WE'VE Been Had !!!! and move on....Europe can not save SBUX. The costs of opening a store in Europe are three to four times more than the US. The European economy is following ours in to the dumper as we speak. Things aren't really that much better in China. It will be a decade before SBUX stands a realistic chnce of growth. By that time Howie wil have sold the brand name and bought his own island in the South Pacific. Don't bet the family farm on a bunch of marketing BS called in by some old cronies from high school. Be an adult....think like an adult....and don't let these people take advantage of you....

[BOSTON STARBUCKS REBEL]

First, of all let me say that I understand if people want to leave the company. I decided to go on "sabbatical" and discover new things about myself which I thought was not possible. I have done some amazing things and probably won't be returning to Starbucks for another few months. But I realize that in times of trouble and distress, is when Starbucks needs us most. Its like being in a relationship and knowing that you need to work it out. People we need hope. Hope that things will get better and that after these days of tribulation the skies will once more open up and let the sun beat down on us.
So if you are thinking about quitting, ask yourself if you're quitting the culture, legacy, and vision of Starbucks or are you just quiting because of a bad manager?
We, at the Starbucks Rebel Alliance, believe that it is necessary for us to fight the good fight. We will both boldly and quietly make our stand against those who would seek the destruction of Starbucks.

BOSTON STARBUCKS REBEL
PRIMUS INTER PARES
STARBUCKS REBEL ALLIANCE

[Me]

PhillySM, I would love to work for you. Unfortunately, I live in another part of the continent.
The thing is, my DM and RD are both number riding leaders. They are the ones taking the fun out of everything remotely nice our store manager is trying to do for us partners. They are the ones telling our store manager to achieve a zero varianz on labour or she is a very bad manager. They are the ones giving her more and more tasks and then tell her her time management is bad if she can't do it all in 40 hours. She usually spends at least 60 hours in the store trying to make ends meet. We are just a small store and customer forecast is not very reliable since weather plays a big factor. Hence scheduling is a nightmare for her and as a result for us as well.
So no, there is no option in calling them. They are the root of the problem.

[Torontodude]

Change is hard.

Starbucks will never again be what it was. Maybe it's morphing into something between a high end fast food place and a casual dining restaurant. lt's now possible to get a complete, hot meal consisting of three items for less than $10. Examples might include:
- 2 venti drio coffees (incl. one free refill), feta/spinach wrap, muffin
- 2 venti drip coffees (incl. one free refill), oatmeal, yogurt

This is great value. It compares favorably to what you could get at a local greasy spoon, Denny's, or even a place like Perkins Family Restaurant. I pefer the atmosphere at Starbucks.

Yesterday, I was at a very busy Starbucks in downtown Toronto at the corner of College and Yonge. The place was hopping! That's not new -- but I did notice the average bill seemed higher. Many people were ordering multiple items, including hot food.

Believe me -- higher average bills are one of the key metrics the Wall Street analysts are looking at.

So maybe -- just maybe -- much of the discussion on this site about the finer points of coffee is misplaced (at least from a business perspective.)

I agree that most of the last remnants of the coffee house culture are being lost in the process. The store I visited yesterday was anything but quiet. But there was a bustling, energetic, "the joint is hopping" type of vibe. Is that bad? There were five people behind the counter, and they all seemed happy to be there -- laughing and joking, even as they pumped the orders out.

I spent over an hour there, but didn't feel rushed. It was still possible to read a newspaper, even over the clatter and music. My only complaint
was no tidying up at the tables. These days, it seems Starbucks customers have to be their own busboys.

But it was an eye-opening experience, and very positive overall. I'll also note that I now load $30 at a time on my Starbucks card, up from $20, because I'm spending more.

Comments?

[FormerNorthernCASM]

BIGDAVE, I don't know where your information came from but Starbucks matched my 401k at 25% when I started years ago and 75% when I left last month. As for the health benefits I found them to be very good. A partner can get insurance for about $25/month and copayments are pretty standard for the insurance industry. When I had to go into the hospital the my insurance paid all but about 2K of my 70K bill. I think that's pretty darn good. Yes, the company is going through a tough time now like just about every other retail/restaurant company but new stores are still being opened here in the US as well as China and other markets. The financial experts I've read say they expect the company to be back on track in 18 to 24 months. Given the state of the economy that sounds about right to me. Starbucks isn't going to disappear because it's a part of so many communities and so many people's routines. All you have to do to see that is stop in to any store between 7 and 9 am to see passionate partners connecting with the lines of regular customers. Those partners are creating the Starbucks experiences and they are heart of Starabucks. They are certainly not deadbeats.

[Jamie]

You think that health insurance that pays all but "2K of a 70K bill" is good? I have a $250 hospital inpatient copay, and that's all.

How likely is it that an hourly worker is going to have $2K discretionary money lying around?

[FormerNorthernCASM]

As I recall, my copay for the hospital was less than your $250. I did have to pay a small percentage of the cost of out-of-network care that I received. Yes, I thought that was good and paid it off over time with no interest.

[nashvegas]

to the people who complain about sales of oatmeal, protein lattes, etc...
why don't you try suggesting it to your customers...it will increase your sales. The signs alone are not enough to convince people to try something new.