Tuesday, July 1, 2008

Time to spill some hot coffee

" Starbucks Corp. will close 600 U.S. coffee shops and eliminate as many as 12,000 jobs, the most in its history, as Chief Executive Officer Howard Schultz slows the chain's expansion after it doubled in size in four years."

How hard is it to run a franchise that marks up the cost of its product by 1000-2000%? Add in the fact that your customers are addicts and to top it off what you are doing is legal. How hard can that be?

Easy, unless you've got your arm up to your elbow in the till.

The company blames slower sales because the economic downturn and yet, they haven't looked at their executive pay as a place to regain competitiveness. Instead, they close stores and cut jobs which will, in effect, hurt their long term financial health.

Though I'm no fan of corporate coffee, my wife and kids love the drive-through pick-me-up stimulant and sugar experience. So, I'll save these baristas their jobs on the condition they take this info and hold their management accountable. Let's look at the FP (financial packages) of some of the folks in charge:
James Alling $12 million
Martin Coles $7.2 million
David Pace $11 million

and the coffee daddy Howard Shultz $472 million

Since Howie is just a man, let's strip his worth down to a man's level. We will leave him with $2 million. The average barista makes about $8/hr. We liquidate Howie's FP (except the $2 million) and that gives us 58,750,000 counter person hours of fine service to the caffiene junkie patronage. That's more than enough cash to keep those 12,000 baristas on the job for more than 2 more years. The economy might turn around by then or a new additive maybe allowed to make the coffee even more important to the clientele.

Barista's unite and raid the corporate kitty!

Then you could even take your coffee in bed.



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