Bye-Bye Lattes, Hello $$$

Written by Diana Golobay

Tuesday, 22 July 2008 07:19 PM

In the midst of home foreclosures and layoffs by corporate giants, it came as no shock when Starbucks announced its latest business plan. The company will close 600 nationwide locations in the next year. Last week, it released the full list of locations that will cease operations. The 17-page list, which can be found on the company’s Web site, includes four Arlington locations. It seems natural that the aggressive expansion of the brand onto virtually every urban street corner in America should reach an end. Although the closings represent a drastic cost-cutting measure, they fit in with a nation struggling to survive its failing economy. When people have to choose between a $5 latte and a gallon of gas, they probably will favor their commutes. The coffee retail giant undoubtedly has felt the pinch and, like so much of corporate America, has begun making cutbacks. It’s unfortunate that the hundreds — and likely thousands — of Starbucks employees affected by the closings will soon find themselves jobless. They’ll join the many workers laid off from the automotive and airline industries. The Shorthorn: Antonina Doescher Oil prices have made commodities like gas-guzzling trucks and air travel too expensive. Americans who are used to such luxuries will do one of two things when facing financial crisis. They will either ask the government for help through aid programs so they can afford both the $5 latte and a full tank of gas, or they will simply make their budgets work. When necessary, they can find the money for gas by scrapping all the lattes, buying compact cars and cutting back on the frequent flier miles. Under the stress of decreased consumer spending, companies cope by either hiking up prices or minimizing expenses. Airline companies have tried the former and faced criticism for their exorbitant fees. Automotive companies have opted for the latter method by laying off workers. Starbucks followed in their steps. The drawback to the company’s plan is that it eliminates thousands of jobs. The good news is that it proves the cautious spending of Americans in financial trouble. Maybe this downturn in consumer spending will teach corporate America to make cheaper lattes and fuel-efficient trucks. Or maybe Americans will have fewer places to spend their money. In turn, they can save it up and use it to prepare themselves for novel ideas — paying bills ahead of time, buying gas and making mortgage payments. — Diana Golobay is a print journalism senior and a columnist for The Shorthorn Views: 1502 | E-mail   Be first to comment this article Powered by AkoComment Tweaked Special Edition v.1.4.6 AkoComment © Copyright 2004 by Arthur Konze - www.mamboportal.com All right reserved

Last Updated ( Tuesday, 20 January 2009 05:23 PM )

 

< Prev		Next >