Starbucks still on the rocks

Starbucks has announced that it will launch its first ever TV advertising campaign to attract customers. You may be thinking: huh? Starbucks has to attract customers? Apparently so, since their sales were lower and their earnings guidance is something they have to watch over. Their cost of sales has risen and their operating margin has fallen 11.2%.

American customers are expected to buy less lattes and coffees due to an expected increase in dairy costs. Starbucks is preparing itself for harder times. Things will be different as they were in previous years, where no publicity was needed and the products basically sold themselves. Now, they must watch over their over their financial situation and take careful steps to avoid losses. They had intended to open 100 more stores than what they just announced they would. They will only be opening 2,500 new stores (only, right?).

Let's hope Starbucks has all the right strategic moves to continue in the game for many years to come. I personally love their coffee and it would be a shame for them to have to change their original concept to survive these harsh economic times.