Trouble Brewing for Starbucks

As I mentioned earlier, during my recent trip to Vienna, I couldn’t help but notice the bustling Starbucks on Kärntner Strasse—mostly young folks and tourists. Like McDonald’s, it’s not the fanciest but you know what you’re getting, and it’s consistent and probably not as intimidating for a tourist as going to Café Landtmann. But perhaps the company would’ve been better off just with this one location rather than, say, the 10 within the city limits. (Likewise, there are 10 in Berlin and 10 in Paris.) As Annie Gasparro reported for Dow Jones,

Starbucks Corp. (SBUX) said its business in Europe is struggling “more than expected” in the current quarter, as economic uncertainty is hurting the coffee giant’s ability to orchestrate a turnaround in the region…. Starbucks concedes that some of its European woes are a result of its own mistakes, such as where it chose to open stores, particularly some in the U.K. The company also says its store operations, from customer interaction to cost management, haven’t been strong in the region.

And in case you were wondering:

Competing coffee shop Dunkin’ Donuts, owned by Dunkin’ Brands (DNKN), has little exposure to Europe at this point, but “we see it as an opportunity going forward,” Chief Executive Nigel Travis said at a conference Tuesday. It’s international doughnut shops have struggled to return profits, so Dunkin’ says it is focused on repairing operations before expanding overseas.


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