More indications here in the US that the company which invented the great coffee rip-off is in deep doo-doo with the announcement on Thursday that Starbuck's has taken a major step back from their music and book business by handing over day-to-day management of its year-old music label to Concord Music Group, as they strive to contain costs and rejuvenate its coffee shop business.
Yet this restructuring of Starbuck's Entertainment, seems a tad strange, when you consider that even though the unit is small, it's been quite profitable and the news comes just over a year after the company unveiled its Hear Music label with great fanfare.
In recent months, however, the chain's overall fortunes have soured due to a sharp downturn in U.S. consumer spending and the fact that people are waking up to the fact that you can actually buy quite good coffee for a tenth of the price. CEO Howard Schultz has gone on record to say... "We are committed to examining all aspects of our business that are not directly related to our core," I guess he means coffee. But you know it doesn't mean cheap coffee!
George Parker
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