Are we facing a latte recession?

August 2, 2007

starbucks.jpgWe’ve heard of manufacturing recessions, housing recessions, and, of course, misery-inducing economic recessions — but is it possible that we are now contemplating our first latte recession. 

In an interview on Wednesday afternoon, Starbucks Corp.’s CEO Jim Donald said that the ability of its customers to order Frappuccinos and cappuccinos is being hurt by rising prices for gasoline, milk and other commodities.

“All these things just add up to, maybe people aren’t going four times a week,” he said. “Maybe it’s three times a week.” 

Yet, for years Starbucks has talked of being resistant to the economy’s bumps.  In an interview with Reuters last September, the company’s Chairman Howard Schultz said people who look at Starbucks as a barometer to measure the health of the economy and consumer spending are ill-informed.
He said that because it targeted more higher-income consumers it was somewhat insulated. “I would never say never, but I don’t see anything that indicates in the near future that Starbucks is going to be susceptible to the economy,” he said then. 

Of course, a latte recession may be better than the full-blown economic variety. That, it seems, might not be too far away if a new poll conducted by The Wall Street Journal and NBC is to be believed. 

The poll results, released today, show that just over two-thirds of Americans believe the country is either in recession or headed for one over the coming year. Nearly half the survey respondents, 46 percent, believed a recession was already underway. There’s not a lot of whipped cream or froth in those expectations, that’s for sure.


The recession is being caused by the oil companies and the real estate people.
the oil companies are making billions of dollars while us people just trying to servive to make ends meet. The housing market is way too high for the average person to buy them. There has been a lot of forclosres, people living in tents or the sreets. I think the government should step in and regulate the oil companies again. There needs to a cap on selling house prices and more lenency on morgages.

Posted by Ron | Report as abusive