Posts Tagged recession
After a very busy start in the year, I want to take a few minutes to give you my 5 cents on Starbucks.
In a recession people in general buy less coffee on the go and rather make their own at home or in the office. Particularly with Starbucks it saves them £1.65 per day, accounting to about £75 a month. That is quite a bit if you think about it. Special coffees are probably even dearer.
Now, with Starbucks closing more and more stores, they also do more marketing. As a registered Starbucks card user I got a letter in the mail with a wallet for my travel ticket and 50p vouchers, one for every day of January. That means, I got £15.50 free at Starbucks this month. Putting that into perspective, if I only buy weekdays, I save about 13% of my bill.
That was clever. Your travel card needs to come out of your pocket the moment you exit the train/tube in London and you get your instant reminder to your savings on the daily coffee. So why not treat yourself. The letter going with the wallet btw. was rather cheap looking. I didn’t keep it but it was A5 on rather old looking paper and bad quality printing if I remember right.
Why do people still buy at Starbucks?
The coffee tastes the same everywhere! Exactly. It is the same principle as McDonalds, you walk into a shop anywhere in the world and the taste is the same.
Why do people stop buying Starbucks coffee?
Because it tastes the same everywhere! Exactly, people are fed up spending the last pennies they have, and this is particular true in a recession, on a product that might be to their taste but is just the “same old”. I even bought Starbucks coffee powder for the coffee machine in the office and…..yes, it tastes the same
So my conclusion is that people start buying less and less at Starbucks. Really because they don’t like to spend more money on something they can substitute at home or in the office. Also, they don’t want to spend their precious money on something that is the same everywhere, e.g. they rather buy at the local shop in support of local businesses and in support of their taste buds.
Will I personally continue to buy at Starbucks?
Yes, to a certain extend. Mainly because I am picky about my coffee and at Starbucks I know what I get. Even if it ain’t the best.
What about you?
Now I am trying to be an economist No, not really. But what is happening around me is tragic.
We all know that Woolies, the flagship of the British High Street goes into liquidation in January. We also have noticed that more Starbucks shops are closing and you might be aware on your own High Street that estate agents close offices or the little shop selling baby stuff or lamp shades has disappeared. Most of those shops are on the limit to profitability and therefore will have to close when people stop spending.
More people might buy a lamp shade at Homebase for instance because it will be cheaper than in the local lamp shop. Whilst a year ago you might have preferred to have a better service and spend a couple of quid more, today you would not.
However, there are other stores that seem to disappear too:
- The Pier – one of the shops where my wife buys lamp shades and we bought curtains, carpets, glasses, candles, CD racks etc. etc. – no shopping spree without a visit to The Pier. Well, from now on it will have to be.
- Whittard of Chelsea – I bought my first ever coffee beans there and it is one of those shops you know that you find a nice present, good tea or alright coffee. The latter because my coffee taste developed Then again, I bought some espresso coffee there the other day. Maybe I go back today and buy some sales items. 120 years of history being vanished in one recession.
I believe it was Keynes who said there cannot be continuous growth. There will always be a time when we enter a recession and companies that are not profitable will disappear. I personally believe that is healthy and do not believe in bail outs. But I don’t want to be political in my blog
When the recession is finally over, maybe end of 2009, maybe much later, we might see new shops appear. Very similar to the ones we have seen. Or, we might not, depending on how much consumer and seller confidence there is. The Pier for instance will re-open, I am sure. New management, slightly different style but a very similar shop. Why? Because I believe the UK High Street has a need for a shop like it. Maybe there is a business idea.
Until then we have to wait. See more redundancies, see more shops and banks closing and need to wait. We will shop in Asda instead of Waitrose, eat less take aways and cook more at home. We will gas the car less frequently and walk more and be glad if we can afford the mortgage payments. Unfortunately not everyone can.
So let’s hope for the best and have a Merry Christmas. As a survey suggests, people will celebrate Christmas because it only comes once a year. Then again, that might change too, you never know.
Today’s day does mark an interesting mix of stories in my BBC News Alerts.
Here we go:
In 1941 Germany and Italy declared war on the US. Now that is history, luckily.
Present is that Germany and the UK fight about recession counter measures.
Future is the gender of our baby which we found out yesterday but are only 90-95 percent sure. We accept bets and guesses
So, that is what I call a day in history.
Have a good one.
What a nice week lays behind me. Non stressful I have to say but very productive.
Now, having had a massage today, shopping, anticipation of more nice wine tonight, I wonder, “how am I doing”. The recession is there (or almost), the continuous growth for almost two decades has stopped (Keynes could have told you that) and now…what is on the horizon?
People and companies spend less money on marketing and if they do, they spend it on online marketing as it is measurable. So my industry should do “ok”. Am I ok? I think so. Not only am I not too worried about the recession in our industry, then again we notice the outcome too, but also I am not yet too worried about the mortgage and the family. That might change of course.
People say in a recession you sometimes find the spending goes up. People try to buy themselves out of the recession, buy extravagant things to feel as if they can still do it. That they are noticed and show off that the recession is not hitting them as hard. Not sure if I would. But, I cannot say I am spending less. Maybe, I am going out less often but I have not been a big fan of going out anyway. Maybe I cut back on my gym membership and maybe we are all out of the recession before we all know it. Time flies, you remember? And, after every recession, we hope and the past says, there should be prosperity. Interesting FAQs here.
But that is just about me. Selfish me? No, because I am interested in how you are doing too. How my friends are doing and how they cope. Will the financial sector and my friends working in it be ok? I think so. Not only because I believe in my friends but also because I believe in the financial sector. All those people saying it is their fault. That is capitalism for you. Would you prefer a communist system – I don’t think so.
Greed – is greed part of our culture. For some. Maybe even for me. But money is not the answer to everything, is it? For some it might be but sooner or later they find out it is not. Surely, money can make ones life easier, possibly more enjoyable, more lavish. However, will it make you happy – no.
So, sitting here today, looking outside and enjoy the almost winter-ish atmosphere, I am happy. Very happy.
I am not doing badly, maybe could do better. But, I could do a lot worse. I appreciate what I have, what I own and what love I get from my family and friends. And, I am happy to share the love.
Now, before I finish there are two requests:
1. please do not count the amounts of “maybe(s)” used.
2. let me know how you are doing.