There’s nothing inherently wrong with reasserting a corporate identity, as Starbucks is doing with coffee tastings and the like. Yet with a price/earnings ratio above 40 and coming off a comparable-store sales growth figure in July that was the lowest since 2001, Wall Street won’t give the brand strategists a lot of room to maneuver - especially the August sales report, due after the market closes, doesn’t impress.
Starbucks stores seem ubiquitous in the U.S., but company is not inclined to throw in the towel on U.S. growth. That’s why it has sought to stretch its brand, through book sales, music, movie promotions and expanded menu offerings. The resulting operational diversity has been cited as a culprit in the weak July sales report — supposedly, the time it took to serve new chilled beverages reduced its capacity to move coffee buyers through the checkout line. Yet the data suggests that overall, the company’s strategy has been working well so far.
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