Starbucks struggles, but not locally

Earlier this week, Starbucks announced it would close 600 underperforming stores during the next year starting later this month. Included in that news was the downgrading of store-opening plans from around 400 stores next year to between 200 and 350.
So with all the financial worry brewing around the brewers, one could get nervous about the local Starbucks in Pittsburg considering the small-town location.
“We are not an underperforming store,” said Michelle Vitale, Pittsburg store manager. “We’re doing very well in our area. We love the Pittsburg community. Have no fear, Starbucks is still going to be here.”
Earlier this year, Starbucks announced plans to close 100 underperforming U.S. stores when CEO Howard Schultz retook control of the company in January.
Starbucks has traded between $28.60 and $15.39 a share throughout the last year. The news of additional closures were announced Tuesday after regular trading hours. During the day, Starbucks had closed down 12 cents to $15.62. But after the announcement, shares jumped 72 cents to $16.34 in after-hours trading.
The plan to cut 600 locations will cause 12,000 Starbucks employees to lose their jobs, but some employees will be given the opportunity to switch to other stores.
“By far, this is the most angst-ridden decision we have made in my more than 25 years with Starbucks,” Schultz said in a message to employees on the company Web site.
With the economy in such bad conditions and the dollar struggling internationally, many people are tightening their wallets and pinching pennies. Many people assume that would mean fewer discretionary expenditures, a category that often includes coffee.
But against logic, Vitale said the Pittsburg Starbucks has not been affected.
“Ironically, you’d assume coffee is among the first things to go in a bad economy,” Vitale said. “It’s one of life’s little luxuries. People want to hold onto that especially in these times. We’ve actually had a very normal summer.”