Skip to content

No Tears Here

We'll admit it: there's something about the whole coffee house industry that bugs us. Maybe it's the conspicuous consumerism of the whole thing: $3.00 for a cup of coffee. Maybe it's the academic pretension we acquaint with it. Anyway, it may be a sin, but we kind of smiled when we saw this piece in the Chicago Sun-Times:

“You wouldn't know it from the share price of Starbucks (SBUX), but trouble is brewing for the coffee chain. The reasons:

“*Coffee prices are shooting up on worries about lower production from Brazil to Vietnam, and that should lead to reduced consumption.

“*SBUX raised prices already this year and will be tempted to hike them further, turning off some customers.

“*The company is building stores madly to make up for sales slowdowns at existing locations, a strategy that blew up in the face of McDonald's (MCD).

"*SBUX has had to restate profits because of those dreaded words, 'accounting issues.'

“How is this anything but a recipe for trouble? SBUX shares have risen 43 percent in the last 12 months, and closed Friday at $54.44.”