Starbucks has enjoyed enormous success over the years. For a long time, it seemed that Starbucks could do no wrong. They were constantly building new restaurants, with some restaurants popping up literally across the street from other restaurants. If you have ever been to Seattle or New York, you know what I'm talking about.

All of the sudden, cracks started showing in the Starbucks powerhouse. Sales have slowed. The stock price has been falling. There could be a few reasons for this. In the last three years, there have been a couple instances of people boycotting Starbucks. In one instance, the Baptist press starting boycotting Starbucks because of their promotion of homosexual rights. I'm not going to get into a debate about this here, but why is a publicly traded company pushing such a fiery political position? In 2008, a Christian group started promoting a Starbucks boycott over Starbucks new logo that supposedly shows a "naked woman with her legs spread like a prostitute."  The new logo appears on Pike Place coffee drinks. 

 

Despite these Starbucks boycotts, I think that Starbucks financial issues rest in three bigger factors.  First, Starbucks has opened too many stores.  The novelty of Starbucks has worn off as more and more people can go to Starbucks to get coffee whenever they want it.  It almost seems that Starbucks wants to have as many locations as McDonalds.  Second, Starbucks is facing increased competition from lower cost coffee alternatives.  Using the same renewed interest in coffee that Starbucks created, gas stations and even McDonalds now offer cheaper coffee at a much more affordable price.  Finally, Starbucks is falling because their prices are too high.  In a slow economy, most people would rather spend $2.00 for coffee at McDonalds before they spend $4.00 for coffee at Starbucks. 

Ultimately, I think Starbucks can recover from the downturn in their business, but they are going to have to reinvent themselves to bring customers back into their stores.  The menu at Starbucks is too narrow to attract a lot of new customers without venturing into new products.  The Starbucks boycott may have a small affect on their business, but other factors probably contribute much more to their recent financial trouble.