Widely Traded 48 Hour Clock: Starbucks Loses Gas
Stocks: (SBUX)(WMT)(MCD)(TGT)
The shareholders of Starbuck's may wish that new hybrid cars could run on coffee beans, because the once invulnerable food and java retailer may soon join its brethren in the retail business as victims of high gas prices. Same store sales at Wal-Mart and Target have been ugly. Altough Starbuck's most recent monthly figures showed the company's same-store sales growing at 6%, Wall Street wanted 7%.
Will people buy expensive gas so they can drive to buy expensive coffee. Economists might argue that once almost everything starts to get more expensive, people stop buying things. Well, maybe.
Coffee is certainly not as expensive as what people buy at Wal-Mart. But, a designer coffee plus a sandwich can cost over $1o, and there are a lot of things you can get at Wal-Mart for that price.
Starbuck's is likely to continue to grow faster than the average retailer. McDonald's June same-store sales increase of 5.9% should be encouraging to any food outlet.
But, if gas goes much higher, anyplace consumers have to drive to buy things they can make at home could take a haircut.
Douglas A. McIntyre can be reached at douglasamcintyre@gmail.com. He does not own securities in companies he writes about.
The shareholders of Starbuck's may wish that new hybrid cars could run on coffee beans, because the once invulnerable food and java retailer may soon join its brethren in the retail business as victims of high gas prices. Same store sales at Wal-Mart and Target have been ugly. Altough Starbuck's most recent monthly figures showed the company's same-store sales growing at 6%, Wall Street wanted 7%.
Will people buy expensive gas so they can drive to buy expensive coffee. Economists might argue that once almost everything starts to get more expensive, people stop buying things. Well, maybe.
Coffee is certainly not as expensive as what people buy at Wal-Mart. But, a designer coffee plus a sandwich can cost over $1o, and there are a lot of things you can get at Wal-Mart for that price.
Starbuck's is likely to continue to grow faster than the average retailer. McDonald's June same-store sales increase of 5.9% should be encouraging to any food outlet.
But, if gas goes much higher, anyplace consumers have to drive to buy things they can make at home could take a haircut.
Douglas A. McIntyre can be reached at douglasamcintyre@gmail.com. He does not own securities in companies he writes about.
posted by douglas mcintyre at 1:00 PM
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