Summary

Share price slides happened when Starbucks customers slowed and declined for the first time prompting shareholders to sell. Macro cost trends for Starbucks materials are not supporting their current strategy. The strategy needs to focus more on where the high end is going in retail which is to environmentally friendly and luxury experience.  The Starbucks experience in the U.S. has not changed since the companies beginning, but did cheapen with automation. Meanwhile the definition of luxury has shifted.  This article shows that Starbucks has not changed its strategy, but readjusted its current strategy. 

Analysis

The definition of luxury has shifted during the last 18 months.  I renamed it EnLuxury. Enluxury is the wedding of high quality, artisan products (fashion) with environmentally friendly manufacturing of materials, generally using natural fibers, preferably organically grown.  Not only does this bring brand differentiation, it is a global trend to move toward environmentally friendly and human friendly products.


Fashion brands such as Gucci, Cosmetic brands such as L'Oreal have shifted to environmentally friendly or organic ingredients in their flagship products.

Starbucks needs to shift focus to how its operations will fit into the emerging EnLuxury world.

How are they going to reduce consumables, provide a luxury, tailor experience, reduce energy use, and reduce water use will define their leadership role.

The Panera factor, healthy, organic and personal cannot be underestimated.  


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