Starbucks announced yesterday they will be closing 600 stores in the US in order to boost profits. This is up from the projected 100 closings announced in January of this year. Many (including company officials) are citing the slowing US economy and relatively high prices for Starbucks’ recent troubles. However these people are all overlooking the real problem – internet access.
Currently Starbucks offers T-Mobile and AT&T paid wireless services (plans ranging from approximately $10/day – $35/month*) which is ridiculous. Although there have been reports of Starbucks changing this policy (possibly offering the first 2 hours free) they still fall short of what needs to be done.
Starbucks should offer free WiFi internet for customers at all locations.
With slightly over 15,000 stores world wide, even at an additional cost of $250/month/store (which is a very high number) the service only adds 3.75 million dollars to Starbucks’ operating cost, about .038% of their 2007 Revenue.
Obviously this isn’t the way to determine whether a program such as I have suggested would be profitable (presumably you’d take the profit margins on all products and multiply that by the anticipated increase in their respective sales).
My point is simply that internet access is one of the most, if not the most, important points of competition for coffee stores today. That said, with offering free internet access being such a small financial risk (relatively speaking), why the hell does Starbucks charge their customers absurdly high prices to use the internet and then wonder why business is slowing?
*Commenter Fazk notes Starbucks in certain countries do offer free WiFi so this doesn’t apply to all 15,000 stores. You can follow our discussion in the comments section