Starbucks (SBUX) | Trading a Fundamental Change

StarbucksI love Starbucks. I think Howard Schultz is awesome. His first book Pour Your Heart Into It is a must read for any entrepreneur.

To put it bluntly he is a CEO I admire. The passion he puts into his company is infectious.

Starbucks is not a deli.

If I want lunch I am going to a place that makes sandwiches. Or a place that makes pizza.

Expanding into the “lunch world” will make them a coffee shop that sells sandwiches. Don’t do it.

I was in this business for a long time. Margins will go down and people will be pissed off who want a coffee while they wait longer.

Starbucks’ New Wraps Highlight Its New Growth Driver

Starbucks Corporation (NASDAQ: SBUX) is known almost globally as a coffee roaster, coffee shop and café. However, the company is seeking to expand its footprint beyond coffee and morning/afternoon snacks, and into the lunch world.

The company recently set a target of doubling its food sales over the next five years. Latest Ratings for SBUX DateFirmActionFromTo Mar 2015Credit SuisseInitiates Coverage onNeutral Feb 2015JefferiesMaintainsBuy Feb 2015Piper JaffrayMaintainsOverweight

View More Analyst Ratings for SBUX View the Latest Analyst Ratings

Dear Howard,

Don’t do it.

We buy snacks there now because it is convenient. I am there to buy coffee. Not for the food. It’s a point of sale impulse buy.

Open a second company. Let everyone know the Starbucks’ process is behind the operation. Let everyone know you are in charge. We trust you. Start a new brand.

Pete

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