Summary
There is more competition in the designer coffee market and easier ways to get a quick breakfast with your coffee.
Analysis
Every consumer has a certain amount of dollars to spend on items. Their coffee fix is no different. When you are counting the pennies in order to make ends meet consolidation is in order. With McDonald's and Dunkin Dounts entering the "designer" coffee market just had to cut into Starbuck's world. If you can buy one cup a day, and you are already at the McDonalds drive thrugh, purchase the coffee there. Dunkin has you captive to look at their donut product. So let me see, sandwich or a donut. The donut wins out and another customer does not enter the world of Starbucks.
I can see that the loss of revenue due to not selling sandwiches will be made up with lower retail coffee, but the growth of Starbucks will be slowed with the other big coffee sellers in the picture. There is only a certain amount you can spend and why go to more then one place?
