by Lyle 'Chip' Chipperson

Created on: November 22, 2008   Last Updated: February 01, 2009

A good educated guess on why six hundred Starbucks stores are closing is as good as what most people would say, "Why do you think Starbucks is closing 600 stores?" The economy isn't so good. And since the economy isn't so good, are people going to a five-dollar cappuccino each and every day? Good question. It's the basic idea that most Starbucks stores are located in middle-class neighborhoods and up. For one who hasn't done all of the research or doesn't know exactly which six hundred stores are closing, I could hypothesize that the majority of the stores that are closing its doors are in these middle-class neighborhoods.

If John Smith was making $52,000 (fifty-two thousand dollars) as an office manager for one of the big three in Detroit, later to be losing his job and downgrading to a sales associate in Sears and bringing home $20,000 (twenty thousand dollars) with three children to feed and a wife making similar pay as his, don't forget his mortgage payment on his house and expenses, John Smith is not going to come to Starbucks each day or close to everyday to spend close to five dollars on his Cup o' Joe. Due to the rough economy, with some experts out there stating that the United States is coming close to the same results of the great depression in 1929. A majority of people are not going to be spending five dollars on a Cup o' Joe. That alone explains why Starbucks stores are closing there doors for good. Although, most people would conclude that the Cup o' Joe that Starbucks serves taste better then the coffee made from there home coffee maker.

What Starbucks could do to keep there doors open is drop some prices on there goods. What also may work is having items at a dollar or under. For someone like myself who hasn't stepped into a Starbucks since 2005, I remember that I did not see an item a dollar or under. If my mind serves me right, I spotted only a few items two dollars and under, which were cookies or small brownies and cans of soda. Why pay for a twelve-ounce can of soda pop for a dollar fifty when you can go to the corner store and purchase one for under a dollar? Of course, Starbucks is not the only guilty party of selling cans of soda for a dollar fifty or a Latte for nearly five dollars. I have stepped into lesser-chain coffee shops that sold a twenty-ounce bottle of soda pop at two dollars.

Due to these tough economic times, people are not going to pay a large sum of money for thereir morning Cup o' Joe when they can brew one themselves at home for fifty cents (if so they are willing to do it), or go to the gas station and pick one up for a little over a dollar. But to be fair to Starbucks, the last three times I have been to one, I have stayed in the store for two or three hour intervals looking to finish a writing project. I can see a Starbucks being useful for people unable to concentrate at home or having a spell of noisy people in the library in exchange for over-priced items. I never had an employee tell me that I've been in the store for too long and I have to buy something or leave. Unless the store was closing and therefore, everyone has to leave.

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