Friday, July 10, 2015

Starbucks; The Perfect 47% Business Model


Starbucks just announced this week that they're  hiking the price of a cup of coffee from 5 to 20 cents.  That sounds rather small, but with their previous, and frequent price hikes consumers are now rapidly approaching the $6 dollar coffee threshold.  And I think that's marvelous.  After all, the zombies stupid enough to pay $6 bucks for a cup of coffee are the same people who believe we ought to give burger flippers $15 an hour, and as long as the Starbuck zombies are footing the bill I'm fine with it.

For the pitiful few who don't know, Howard Schultz, CEO of Starbucks, is that rare business socialist who gives a 20 hour a week employee a nice salary, a 401k (with employer match), health and life insurance, a free pound of tea and coffee per week and a 30% employee discount for anything they wish to buy.  Starbucks provides paid vacations each year and, if you knock up the sweet barista working next to you, Schultz will provide 6 months of both maternity and paternity leave so you can both "bond" with your little bastard child, conceived without benefit of marriage.  Ain't that great?

And last year old Howie upped the benefit ante quite a lot.  He's now paying his 20 hour per week employees the full costs of a four year college degree!

Again, I think this is marvelous!  Howard Schultz has made himself a liberal god and his zombie customers seem all too willing to pay for it with their $5.00 lattes!  What could be better; whatever Howie can suck from his customers is just that much less that his crop of millenials will be taking from the public trough!

I'm something of a coffee snob myself.  But I drink my Peet's Coffee, Goruda Blend at home for less than a buck a day......think I've been in a Starbucks twice in the last 20 years and didn't find the coffee worth the price.

But I'm glad there's a sufficient number of zombies who'll fund Howie's socialist goals!  I remember a few years back Starbucks ran into a bit of a consumer price revolt and Howie had to retrench and close some Starbucks franchises and trim costs.  But, thank goodness a whole new crop of Starbucks zombies came into their coffee drinking years and joined the other lemmings more than willing to pay $5 bucks for a cup of joe.

Here's to you, Howie!  Why don't you shoot for retirement at 35 years of age next...that worked out so well for Greece!


Brian Clancy said...

I had a Starbucks coffee once. Meh.

Jeff H. said...

When I worked at McDonald's, a hamburger was 15 cents. Now they go for six dollars. Wonder how many they will sell at $10 when they have to increase wages and benefits for the obamites working for them. Or should I say, working against them?

A Modest Scribler said...

Yeah, Brian, that was my reaction to Starbucks coffee as well. Jeff, I don't know what's gonna happen to fast food prices but those old .15 cent burgers sure tasted better back then than they do today.

TheRandyGuy said...

I think the execution of Starbucks is terrific! Think about it: Charging $5+ for a cup of coffee and people willingly part with their hard earned money (or put it on a CC - STUPID). Wonderful! Capitalism at its' finest. No government coercion, no mandatory anything - just a price that you can choose to pay, or not. Marvelous. I've been to Starbucks twice in my life - gift cards only, not my money. Good coffee, but $5 coffee? Nope. That said, if people are willing to pay it, God bless him (and he should thank that same Lord for the ignorance of the masses).

A Modest Scribler said...

We're on the same page here, Randy.