.......the proliferation of coffee and now breakfast competitors took a new turn with the Horton-BKW merger. In other words, the day of being the only show in town so to speak is over. With SBUX locations planted all over the US and growing around the world, one could say they still have the EDGE......................BUT.....it's not like Dunkin, BKW, MCD.....and likely, many more, can not yap at SBUX ankles and chip away at that dominance enjoyed by SBUX for decades now.
Electronic pay is exciting but, WHERE is it? Simply put, that/s not a MOAT surrounding SBUX, it is a circular body of water filled with competitors trained alligators!
So hats off to SBUX, what a ride it has been but now, the ultimate compiment of mimicking success has led to a HUGE pool of competitors and the list grows.
Who ever would have thought that someday the cheeseburger would give way to a great selection of coffee drinks and breakfast?
Yet, here we are..........................I hope I am wrong.....this is a dynasty I have an immense amount of respect for business wise........but I think the walls are now visible and they are high and getting taller........all IMHO
If Dunkin, BKW, and MCD were capable of taking a market share from SBUX, they would have done so already. They've have plenty of time. You're right about the potential threat from the new merger though. That might take market share from SBUX if their operation improves as a result of the merger.
Hey everyone, I am drinking a SBUX right now. I love SBUX......my concern is simple, when sector proliferation occurs, pricing becomes the very first means of competing thus squeezing margins.
Perhaps too many on this board are too young to remeber the cola wars. IE PEP VS KO. Or how about the BUD vs Miller Beer wars, way back when?
Or maybe the WEN vs MCD vs BKW wars? Sure, all three live on and will continue to do so but the skies were BLUE for MCD when MCD ruled the burger patch. Today we see IN-and-OUT burger is JUST ONE competitor encroaching on MCD turf or what was once MCD turf.
Despite MCDs foray into the coffee zone, SBUX has done well and for that, I am grateful! However, the momentum of proliferation into the coffee/tea sector is picking up at warp speed.....remember, the coffee sector was essentially an untapped, unrecognized, and basically IGNORED sector for SBUX first couple decades........now, the big boys are seeing the picture and jumping on board.
unfortunately, I take BKWs foray into the sector in a rather serious fashion to be a game changer. I hope I am wrong but IMO, this changes SBUX into a SHOW ME stock. I want to see them keep their growth rates, profit margins etc. I fear however, that others will follow BKWs lead and pile on even more into the sector at which point the consumer has a few considerations, quality, price, and CONVENIENCE. All of which CAN deflate SBUX drive-thru/walk-in.
Sorry for my take but this ain't the first dance in the food/beverage patch.....and only IMHO ! To be sure. I invite other views that put my fears to rest......supposition not accepted!
You make a good point, but yesterday's article in the Realist documented that Starbucks is focusing on expanding its relevant product line to keep up with the competition. Some examples: introducing 20 different micro lot coffees around the world, opening Teavana teabars with new products like Teavana Oprah Chai and Teavana Shaken Iced Tea, coming out with handcrafted beverages, and launching Fiazoo, a carbonated drink. Game changers like Starbucks and Apple always have competitors nipping at their heels but manage to outrun them all the same.