The Death of a Coffee Giant?

Ok, I am currently living in New England, so I get quite a bit of hype from Dunkin’ Donuts.  And they do a really great job.  I love the way they are trying to rebrand in a changing market.  Ok, so I could do without the peewee hockey commercial (which I couldn’t find in a quick search.  Sorry, you’ll just have to suffer the loss).  But it worked – I still tried out th Milky Way hot chocolate the next time I was at Dunkin’s.  And the jackhammer commercial (also couldn’t find) and this musical one are both fun, and cute, and have a wide appeal.  And that’s really what Dunkin’s has always been about – middle and lower class wide appeal.

A Chinese Starbucks knockoffBut I wouldn’t really consider them a  coffee giant.  A giant is a company so well-known that imitators can get away with pulling in revenue from a similar circular logo.  A giant is a company that can claim they don’t mind local competition to thier chain – that funding small local shops promotes a greater ‘coffee culture’ that ultimately buoys their revenue.  A giant is a company that can open a store inside the Forbidden City.  Starbucks is that giant.  And they’re sinking.

It may be in part to the current sink in the economy, or simply to the newness of the fad of Starbucks finally dying off.  But the fact remains that share prices are nowhere near they were a little more than a year ago, having fallen from around $40 a share in late 2006 to just under $20 currently.  Bad news for a company that doesn’t have much of the world left to expand into – could this be the beginning of the end?

And now they may owe bunches to their baristas.  Evidently Starbucks stores compensate their managers as well as lower service staff from the tip jars.  Having never worked as a barista, I’m not at all sure what the pay is like, but if the company is relying on tipping for payroll, the actual salary is probably pretty low.  And I’m guessing that for managers, it’s not so low – but maybe less reasonable than I previously would’ve assumed.

Tipping at someplace like a coffee shop is unclear at best.  There are no real standards for tipping, and some places may not even have a tip jar.  In addition, it’s not like a restaurant where managers are not serving customers.  In a coffee shop, managers are most likely serving at the counter or tables just as much as the lower employees.  Since tipping is supposedly for good service, shouldn’t they also be sharing in the rewards of that service?

Now, this particular case may be less murky because of California state law.  If the law clearly states that manager cannot share in  employee gratuities, then Starbucks was breaking the law.  However, it should be addressed whether or not a) the law clearly indicates all supervisors or simply those employed in certain industries and b) the law is ultimately fair or should be rewritten.  If the case falls out against Starbucks, some high-class lobbying might be in order.  After all, who’s going to do it if not the giant?


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