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Starbucks Coffee

The research paper has highlighted the need to determine whether Starbucks has been able to cross the hurdle of recession with the UK economy having managed to scrap its way out of the turmoil. The paper determines that even if the overall economy has improved the consumer confidence level is still far behind and is not expected to return immediately. This would mean that Starbucks in UK would have to wait for quite a long time if it has to present financial figures of the boom time. The various impression given by different authors further justify the problem which this paper would like to emphasize upon.

According to author D’Innocenzio, retail chains have cut the number of stores they previously used to operate by shutting down those that are unprofitable and thereby slicing the consumer pie into even thinner pieces (2009). Further, the customers feeling the heat of the recession has cut their spending while they are at the store. With the recession now well into its second year, consumers are more concerned about losing their job than trying to maintain their daily intake of $4 latte cup (Shepherd, 2009).

The same has been almost echoed similarly by author McEven who says that some business leaders anticipate that during such times the consumers would not only be more demanding, but would be even more particular about the quality of their products (2009). The problem is further compounded by the priorities which the consumers place before themselves as well as their own psychological preferences. For instance, according to industry experts consumers often think that the supermarkets offer better and fresher food and drinks than restaurants due to their display of healthier and fresh looking stuffs (Hill, 2010).

Thus, given to reason the fact that word of mouth does have tremendous potentials in influencing consumers it can be prove to be quite a hurdle for restaurants to entice customers. Word of mouth is more efficient than ever before, and customers can even make or ruin a business (Cesario, 2009). However, all authors are not pessimistic about the sale of beverages and this pertains to Starbucks too. According to guardian co. uk, the economy will have to be really bad if Starbucks becomes a regular feature in the British high street (2008).

Wilson-Rymer, the Managing Director of Starbucks UK is even more optimistic when he says that the company will sell coffee on Thomas Cook planes and is expanding its drive through network in Knitsbridge, the West End and Brixton (Cengage Learning, 2010). Of course this may not make Starbucks come out of its hole overnight, but it would surely help in keeping on to its future growth targets. There is no magic wand to make the recession go away, but a star may lead the way and all the more if it happens to be ones brand (Grayson S and Grayson B, 2009).

According to Heher, part of Starbucks gain has come about by its stronger sales of single-serve instant coffee and its 30% boost in holiday drinks (2010). To add to the existing woes of Starbucks is the competitors offering with reduced prices on almost all coffee makes which inevitably makes even the regular consumers annoyed at the high price which Starbucks charge them. Espresso coffee from McCafe for instance, is gaining a vast new market altogether (Bell, 2009). The above facts justify the problems which this research paper has earlier stated.

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