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Starbucks says 2009 will be ‘extremely challenging’

2008-11-27 21:51:54 (GMT) (Caymanmama.com - Business News)



Starbucks will face an extremely challenging fiscal 2009 due to the sagging economy

Seattle, Washington (CaymanMama.com) — The economic crisis has been hard on everyone from individuals to large corporations. One of the corporations who will be hardest hit in the upcoming year is coffee giant, Starbucks Corp.

According to Dallas Business Journal, the increasingly weak economy will make business hard for Starbucks in 2009 and company officials warned in a filing with the Securities and Exchange Commission.

Earlier this year, Starbucks Co. announced a list of 600 company-operated stores across the U.S. that would be closing their doors. Nearly two dozen of those were in the Dallas-Fort Worth metroplex alone.

“The company will face an extremely challenging fiscal 2009 because Starbucks customers may have less money for discretionary purchases as a result of job losses, foreclosures, bankruptcies, reduced access to credit and sharply falling home prices.

“Any resulting decreases in customer traffic or average value per transaction will negatively impact the company’s financial performance,” Starbucks officials said.

The coffee giant reported it expects same-store sales to decrease drastically in 2009’s fiscal year as compared to 2008, and also anticipates “relatively flat” revenues in 2009 compared with 2008.

In a filing, the company stated “As a retailer that is dependent upon consumer discretionary spending, the company expects to face an extremely challenging fiscal 2009 because of these economic conditions.”



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