WILL THERE BE MORE STARBUCKS CLOSINGS?
The recent rash of Starbucks shutdowns has proven that when the economic going gets tough, few people are willing to pay $5 for a cup of coffee. And if this week’s poll respondents are correct, the company hasn’t hit bottom yet. An overwhelming 84% predict there will be more Starbucks closings in the coming months than the 600 already, and only 16% are optimistic that the squeeze is over. Robert Molloy, a vice president with CB Richard Ellis, says that Starbucks isn’t the only retailer having trouble. Here is what he has to say:
“All businesses are challenged in today’s economy, and retailers are no exception. They’re looking to be more efficient. That involves closing their underperforming stores, repositioning themselves in their respective markets, and concentrating their efforts on strategic expansion plans in markets where they are going to thrive. It’s smart business.
“It’s not just Starbucks doing this. Other retailers and businesses in general are trying to be smart and efficient, survive in the current economy, and plan for the future.
“With the troubled housing market, increasing fuel costs, etc., generally the retailers who are thriving right now are those who offer necessity and discount goods. However other types of “high end” retailers in strong demographic markets where people tend to have more disposable income should continue to do business.
“It’s too soon to tell how much of a downturn we’re going to see before the economy stabilizes and what the overall effects will be on the retail market. I do think retailers will continue to expand in selective markets, tenants will continue to consummate new leases, and the strong, efficient, and well capitalized will survive.”
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