Does Starbucks Already See A Rebound?

Perhaps it’s due to the fact that journalists drink so much coffee (guilty), but we’ve seen way too many article that use Starbucks or latte sales as some kind of proxy for the overall economy. So there’s bound to be interest in comments made by Starbucks CEO Howard Schultz that they’re already seeing a turnaround in business: “The downturn continued in the fourth quarter, and we did see a slight improvement in the first weeks of Q1 … which might suggest that Starbucks may have hit bottom in terms of negative transactions in our fourth quarter.”

That’s pretty wishy-washy, but if you’re looking for some good news right now, that’s about all you can ask for, other than the not-quite-as-bad-as-it-could-have-been-thanks-to-government-spending GDP report.

As for Starbucks itself — not Starbucks the proxy for the economy — The Journal reported this week that competitor McDonalds was having a rough time ramping its coffee business:

Meantime, some McDonald’s franchisees don’t want to spend the money to implement the full beverage program and the remodeling that goes with it. McDonald’s has estimated it will cost an average of $100,000 per location, and pledged to cover a portion of that expense. The credit crunch is expected to make it harder for franchisees to secure financing although McDonald’s executives say franchisees have ample financing options.

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