Kiss your double espresso, third milk, third foam, cappuccino grande good bye.

by Jeff Davis

The Seattle Post-Intelligencer informs us: “Starbucks Corp. said Tuesday it will close 600 company- operated stores in the next year, up dramatically from its previous plan for 100 closures, a sign the coffee shop operator continues to struggle with the faltering U.S. economy and its own rapid expansion. Seventy percent of the stores slated for closure had opened after the start of 2006…To put it another way, Starbucks is closing 19 percent of all U.S. company-operated stores that opened in the last two years.”

Egads! Does that mean that Americans might have to re-adjust once more to a world wherein there is not a Starbucks on every corner? It’s the end of civilization as we know it!

Back to the PI: “About 12,000 workers, or 7 percent of Starbucks’ global work force, will be affected by the closings, which are expected to take place between late July and the middle of 2009…most of the employees will be moved to nearby stores… The 500 additional stores set to be closed had been on an internal watch list for some time. They were not profitable, not expected to be profitable in the foreseeable future, and the “vast majority” had been opened near an existing company-operated Starbucks.”

Setting up coffee shops sometimes within sight of each other doesn’t sound like a very smart way to run a business, but then corporate America isn’t exactly distinguished for its brilliant vision and leadership. Sounds like the rumors and allegations were right, and Starbucks just opens these stores anywhere they please just for the heck of it. Reality had to set in sometime. Life will be rough, but you may have to walk four, maybe five blocks to get your caffeine fix in the future.

Okay, let’s boil this down to basics. We are going to see more and more of this kind of business reduction and closure in the near future. Americans have always had way, way too much money to spend on frivolous stuff including $5.00 cups of coffee. For millions of Americans that money is going into their gas tanks, not to mention buying groceries at inflated prices. The Starbucks’ announcement makes it sound like these stores were already in trouble. Most likely, they were scraping along barely paying for themselves. The sky high gas prices however are causing a significant drop in profits for over-priced coffee vendors everywhere, and only the really healthy stores in affluent neighborhoods will survive.

Millions of Americans have their budgets stretched as tight as a celebrity face shot full of Botox. Working class Americans are lucky if they can still pay all their bills and drive their car around –a little. Many Americans with low wage jobs and long commutes are literally walking off their jobs because the price of gas for the commute equals their after-tax income. Millions of Americans with a huge mortgage and expensive private schools for their kids are finding themselves stretched thinner than ever.

It’s not just lattes that Americans are doing without. A surprising number of Americans have lost their electricity. One news article reports “More Arizonans are paying their electricity bills late and having their power cut off, a problem that could worsen for families with the approach of summer’s most intense heat - and highest bills. Nearly 56,000 households in Arizona Public Service Co. and Salt River Project territory fell far enough behind on their bills to be cut off from power from January to May, a 40 percent jump from a year earlier, according to the utilities… APS hasn’t cut as many people off but has seen double-digit increases in the number of those getting a final 24-hour notice and seeking payment extensions, officials said. Utility officials blame the trend on the bad economy.” There have been double-digit increases in delinquent utility bills nationwide. Once winter rolls around an equal if not greater number of people will be unable to pay their heating bills.

True, it’s hardly a crisis of civilization when one can’t step two doors down and get a double espresso mocha latte grande, but as signs of the times go, this is one that really seems to hit home. When Bear Stearns and Countrywide Mortgage were going bankrupt, only a few business-minded people seemed to care. But actually seeing the local Starbucks close down is a “slap in the face” shock for millions of Americans. Too bad people didn’t wake up sooner and nominate a better candidate than John McCain.