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Is Starbucks the most expensive coffee in the world? Chief executive Howard Schultz insists not, but admits he may have to bring prices down in some markets to counter the perception that rivals are cheaper.
Profit in the last three months drooped 77% to $25 million (£16.8 million), a sign that it is struggling to keep custom in the face of a global recession.
Since January 2008, Starbucks has moved to shut more than 900 stores and cut towards 7000 jobs.
Chief executive Howard Schultz says the notion that Starbucks is being hit by the competition is overdone.
"Speculation that Starbucks is losing retail market share to competitors has been grossly exaggerated," he said. "We know customers are looking for meaningful value, not just a lower price. In the coming days we're going to arm our consumers and partners with the facts about Starbucks coffee."
McDonald's in particular has made inroads into the coffee market.
Reader views (4)
starbuck is selling watered down sludge
- Nino, london, 01/05/2009 13:17
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In Toronto, we call 'em FOURBUCKS. WAY too much for a cap!
- Michael Spencer, Toronto, Canada, 30/04/2009 15:17
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I don't do Starbucks anymore. I used to a few years ago, but the coffee was always warm at best and a poor quality coffee. Try Cafe Nero or Costa Coffee, quality and cost wise they are a far better.
- Mark, London, 30/04/2009 14:43
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We stopped visiting Starbuks last year. The coffee is of only average quality yet the prices charged are far too expensive.
- Paula Hickman, London, 30/04/2009 12:38
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