Starbucks Is Going To Start Selling Alcohol And Do It Better Than Anyone Else [Starbucks Corporation]

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April 11, 2014 11:49am NYSE:IYC NYSE:VCR

starbuckseveningsThe latest challenge facing Starbucks Corporation(NASDAQ:SBUX) is a shift in traffic away from mall locations. In January Schultz explained that mall customers were gone and not coming back. When companies face a radical shift in consumer tastes they have

two choices. They can go the Kodak route and die clinging to their top position in a dying industry or they can go back to their roots and find a way to stay true to their core concept without becoming extinct. As a retail genius it never seemed to occur to Schultz to opt for anything but the latter.

Starbucks sells stimulants in liquid form in a unique environment. Their store base is shifting away from family based malls and into free standing locations. Most bars look alike. They are dark, have several TVs and loud music. When it comes to serving alcohol they are every bit as tired as the diners which dominated the coffee industry in 1984 before the arrival of Starbucks.

On top of that the market for selling stimulants tends to get pretty slow in the afternoons. So Starbucks has thousands of locations that are underused at night, an unequalled ability to sell beverages and Schultz, one of the best business men in history when it comes to creating a special, comfortable experience for customers.

Of course he’s going to start selling alcohol. He’ll do it better than anyone else and Starbucks will win. The logistical problems being cited (menu issues, legal restrictions, etc.) are nothing to an organization like Starbucks. The place is an execution machine entirely focused on the entire gestalt of serving customers. There aren’t going to be bar flies harassing teenagers at the local Starbucks. To think otherwise is just naive.

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