retail news in context, analysis with attitude

On Friday, MNB took note of a MarketWatch report that Starbucks plans to open 800 new stores in the coming fiscal year, a 33 percent increase over its store opening rate during the past year. A quarter of these units will be in the US, with the rest overseas; China alone will represent 25 percent of the overseas total, or 150. Starbucks has said it wants to have 1,500 stores in China by 2015.

My comment:

I wonder if the folks at Starbucks are breathing their own exhaust. That’s at least a possibility, since they are getting aggressive about store openings at the same time when the economy seems to be shaky ... which, history suggests, isn’t a good idea. (If it doesn’t work, I wonder who Howard Schultz will blame this time?)

MNB user Mark Olivito responded:

Wow!  I love your courage, keep up the good work…..but this is awfully critical of Howard Schultz, someone who has pioneered stock options & health care for part time retail workers, helping to drive a better customer experience.  You have always been a big fan of Jim Donald, for good reason.  But it seems like you are not “fair and balanced” in your view of a hired gun vs a company founder.  His choices were to take action and control of the company, and as a result, take on FULL accountability, or continue to see it slide.

If you have not read “Onward,” it’s a good read, obviously from the POV of Howard Schultz.

A fair point.

To be clear, I’ve never said that I’m fair and balanced. That’s somebody else’s slogan. Mine is “news in context, analysis with attitude.” On that scale, I think I can claim truth in advertising.

Sure, Jim Donald is a friend of mine. I’ve always been up front about that. (Though we’ve become friends since he left Starbucks.)

When Schultz re-took the CEO job, I wrote that is seemed like a specious argument to suggest that he’d somehow been disengaged from the company’s strategic and tactical efforts. He was still the chairman, and he still controlled the board. I understood the reasons, but thought he was being disingenuous. And not fair about his own responsibilities.

I’ve read parts of “Onward,” and it strikes me as self-reverential. But hey ... he’s built a great company, I still drink his coffee every day, and he has a lot to be proud of. But I still think my question - asked about an expansion taking place during a time when a lot of people have a recessionary mindset - is a legitimate one.

Friday’s Eye-Opener read as follows:

With all the debate, accusations and recriminations taking place in Washington, DC, these days as they debate the debt ceiling and the broader economic crisis, here’s a note from Business Insider that is a definite Eye-Opener.

According to the story, the US Treasury’s latest daily statement says that the government yesterday had an operating cash balance of $73.8 billion.

Compare that to Apple’s last earnings report, which said that the iconic company had $76.2 billion in cash and marketable securities on hand at the end of June.

“In other words, the world's largest tech company has more cash than the world's largest sovereign government,” Business Insider writes.

Of course, there’s a good reason for that: “Apple collects more money than it spends, while the U.S. government does not.”

I still think that’s amazing.

One MNB user observed:

What would Steve Jobs do? If the role was reversed, would Steve Jobs cut investment in apple, or would he attempt to raise revenue? Maybe a combination of the two. What do you think?

I think he’d do both.

I suspect his argument would be that you can charge more for premium products and services. (One of the problems the government has these days is that it looks like it is delivering cut-rate products and services.)

I also would refer you to another statement that Jobs made about investment and innovation: “We decided to innovate our way through this downturn, so that we would be further ahead of our competitors when things turn up.”

Jobs said that during the 2001 recession, and the innovations that were begun then resulted in game-changing technologies and products such as the iPod, iPhone, iTunes and the iPad.

Seems to me that if you stop investing, you stop innovating. You stop innovating, and you grow stagnant and die.

Another MNB user disputed the numbers:

Government figures don’t include Fort Knox…does Apple have a Fort Knox???  Plus the government can print all the money they want…can Apple print money??? Just sayin...’

Actually, it almost seems sometimes that Apple does print money.

Plus, I don’t trust Fort Knox.

I’ve seen Goldfinger.
KC's View: