Saturday, January 31, 2009

Success is never final:


This is so wrong. R&I magazine has a story about new moves by Starbucks

Perhaps the most surprising move, however, was Schultz's announcement that Starbucks soon will enter the value-meal race. Schultz has long belittled such a move and said that customers were willing to pay a premium for the Starbucks "experience."

But value-leader McDonald's has been on a tear. Its same-store sales grew 7.2% in the fourth quarter, and its new McCafe coffee bars -- slowly spreading nationally -- have stolen business from Starbucks with lower-priced premium coffees, lattes and cappuccinos.

Before every restaurateur jumps on this bandwagon they might want to do a Return on Investment analysis. Does a 7.2% same store increase justify the capital expended by McCafe?