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Starbucks has reported better-than-expected quarterly earnings as sales rose over the festive period.
The coffee giant’s total net revenue rose to $5.37 billion from $4.8 billion in the three months to December 27.
Starbucks’ revenue was boosted by Christmas holiday sales which rose 9%.
Chairman Howard Schultz said the strong results showed the “strength and relevance of the Starbucks brand around the world”.
Starbucks said 1-in-6 American adults received a Starbucks Card over the holiday season.
The company said sales at stores that had been open 13 months or more rose by 8%.
Visits to established stores in the China/Asia Pacific region rose by 4%, but missed the 6.1% growth target analysts had predicted.
During a call with investors, Starbucks CFO Scott Maw said the company had locked in the price for more than 90% of its coffee bean needs in 2016.
Starbucks has decided to remove #Race Together hashtag from customers’ cups.
The diversity and racial inequality campaign has been ditched after it was criticized as opportunistic and inappropriate. Starbucks wanted to encourage its customers to discuss about racism while they enjoy their coffees.
Starbucks spokesman Jim Olson said the coffee chain’s race initiative would carry on without the messages.
Race Together campaign was launched after national protests in the US over several police killings of black men in New York and Ferguson, Missouri.
“While there has been criticism of the initiative – and I know this hasn’t been easy for any of you – let me assure you that we didn’t expect universal praise,” a company memo from CEO Howard Schultz said.
Some customers said they didn’t want to talk about race while being served coffee.
The #racetogether hashtag was also hijacked after being promoted on Twitter.
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The European Commission will launch a formal investigation into Apple, Starbucks and Fiat in relation to tax arrangements with three EU countries.
The companies’ respective arrangements with Ireland, the Netherlands and Luxembourg will be investigated.
Announcing the move, tax commissioner Algirdas Semeta said that “fair tax competition is essential”.
Last year, a US Senate investigation accused Ireland of giving special tax treatment to Apple.
The European Commission will look at whether the companies’ tax affairs breach EU rules on state aid.
Competition Commissioner Joaquin Almunia said: “In the current context of tight public budgets, it is particularly important that large multinationals pay their fair share of taxes.”
Countries in Europe cannot allow certain firms to pay less tax than they should, Joaquin Almunia added.
The European Commission will launch a formal investigation into Apple in relation to tax arrangements with three EU countries (photo AFP)
The investigations will focus on “transfer pricing”, or whether the countries allowed the multinational companies to charge one part of the company over the odds for goods or services from another part of the company as a way of shifting profits.
Under Commission rules, companies must charge their subsidiaries market rates.
Sanctions for a breach of tax rules could include an attempt to claw money back from Apple, Starbucks and Fiat.
Apple said that it had not had “any special tax deal with the Irish government”.
“We have received no selective treatment from Irish officials,” the company said.
“Apple is subject to the same tax laws as scores of other international companies doing business in Ireland.”
The Irish finance ministry said Apple “did not receive selective treatment and there was no <<special tax rate deal>>”.
“Ireland is confident that there is no state aid rule breach in this case and we will defend all aspects vigorously,” the Department of Finance said.
Last year’s US Senate committee investigation revealed that Apple had been able to funnel profits into Irish subsidiaries or “ghost companies” that had no declared tax residency anywhere in the world, cutting billions from its tax bill.
The Senate committee hearing revealed that Apple designated its Irish entities as unlimited companies, which meant it did not have to publish annual accounts.
The Irish arrangement allowed Apple to pay just 1.9% tax on its $37 billion in overseas profits in 2012, despite the fact the average tax rate in the OECD countries that make up its main markets was 24% last year.
In a 40-page memorandum, the Senate committee said: “Ireland has essentially functioned as a tax haven for Apple.”
Coffee giant Starbucks has been embroiled in a tax controversy for a number of years.
In 2012, the multinational admitted that it had a special tax deal with the Dutch government which allowed it to transfer money to its Dutch sister company in royalty payments.
Starbucks said on Wednesday that its Dutch tax arrangements conformed with financial law.
“We comply with all relevant tax rules, laws and OECD guidelines and we’re studying the Commission’s announcement related to the state aid investigation in the Netherlands,” a Starbucks spokesperson said.
The Dutch finance ministry said it was confident that its tax system was “robust”.
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Nathan Fielder has been revealed as the owner of parody coffee shop “Dumb Starbucks” in Los Angeles.
Nathan Fielder appeared in person at the store to make the announcement, where he said there are plans to open a second outlet in Brooklyn, New York.
There had been widespread speculation that the store, which uses Starbuck’s trademarks, was a publicity stunt.
Starbucks said they were aware of the store but denied any affiliation.
“We are evaluating next steps and while we appreciate the humor, they cannot use our name, which is a protected trademark,” a Starbucks spokesperson said in a statement.
“Dumb Starbucks” opened in a shopping centre on Friday and started giving away free drinks, generating long queues of people.
The decoration of the “Dumb Starbucks” is very similar to that of a real Starbucks.
Nathan Fielder has been revealed as the owner of parody coffee shop “Dumb Starbucks” in Los Angeles
The store front has the same green awning and round mermaid logo as Starbucks’ coffee shops – except the work “Dumb” is placed in large letters above the word Starbucks.
The wall menu inside the pop-up store offered coffee that ranged from “horrible” to “bitter”, as well as products called “dumb iced coffee” and “dumb white chocolate mocha.”
The drinks were served in a white paper cup with a sticker of the Starbucks logo with the word “dumb” added to it.
None of the patrons were charged for their drinks, although there was a tip jar.
The “Dumb Starbucks” coffee shop has also set up its own Facebook page and Twitter handle, which has accumulated more than 8,000 followers.
On the micro-blogging website, it tweeted that “the owner of Dumb Starbucks will be making an in person announcement at our store (1802 Hillhurst Ave) today at 4pm. All are welcome!”.
At the designated time, a YouTube video was posted on the “Dumb Starbucks” Twitter account, revealing Nathan Fielder as the owner.
Nathan Fielder is best known for his work on network Comedy Central and for encouraging fans to pull pranks.
While many have dismissed the store as a publicity stunt, experts say the people behind the “Dumb Starbucks” could potentially face legal action over copyright infringement.
However, in the “Dumb Starbucks” store, the owners posted a statement at the counter stating that the store is protected by “parody law”.
“By adding the word <<dumb>>, we are technically <<making fun>> of Starbucks, which allows us to use their trademarks under a law known as <<fair use>>,” the statement said.
“In the eyes of the law, our <<coffee shop>> is actually an art gallery and the <<coffee>> you’re buying is considered art. But that’s for our lawyers to worry about.”
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This year’s Starbucks limited-edition metal gift cards sold out in mere seconds, leaving a lot of devotees feeling frustrated.
For the second year in a row A portion of the 1,000 cards were sold to the My Starbucks Rewards Gold-level customers who were given VIP access to the site, allowing them to purchase cards one hour before they were on sale to the general public.
According to USA Today, what’s really causing disappointment was that online retailer Gilt accidentally put the Starbucks cards for sale one day before the publicized date and began selling them on December 5.
This year’s Starbucks limited-edition metal gift cards sold out in mere seconds
NBC News reported that Gilt Group claims that 500 cards were sold to the general public at 12 p.m. on December 6. Four hundred were made available for the VIP customers one hour prior, and only 100 were sold when the link accidentally went live a day before the sale.
“I’m not speculating on what we could have done differently,” Starbucks spokeswoman Linda Mills said to USA Today.
She explained Starbucks was obligated to honor those premature sales.
“It was unfortunate that the link went up early.”
Gilt Group claims a technical issue caused the link to go live after a “sale preview” page had a snafu.
One eBay seller has listed a stainless metal card at a “Buy It Now” price of $4,500. The card was produced in last year’s batch and is marked No. 19.
In 2012, Starbucks created 5,000 stainless steel gift cards.
This year, Starbucks decided to make the cards even more exclusive, producing only 1,000 of the rose-colored cards. More than 11,000 people are reportedly on the waiting list for this year’s limited stock.
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Starbucks brings back the $450 limited-edition gift cards that brought on such an unexplainable frenzy last year, but in an even more limited capacity.
Last December Starbucks unleashed 5,000 $450 steel gift cards on Gilt.com, and the cards sold out almost instantaneously
According to Eater, the new cards are made of “rose base metal” and have $400 on them.
Starbucks brings back the $450 limited-edition gift card in an even more limited capacity
They also automatically get the card owner a Gold-level Starbucks membership.
There are only 1,000 of the them up for sale on Gilt.com and the mad internet dash begins at noon ET on December 6.
In 2012 the cards were sold on eBay for more than double the asking price.
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Starbucks has to pay $2.76 billion in damages and other costs to Kraft Foods in a dispute over packaged coffee, an independent US arbitrator has ruled.
Kraft began selling bags of Starbucks branded coffee in 1998 under a deal that was due to run until March 2014.
But Starbucks ended the contract in 2010, accusing Kraft of breaking the terms of their deal.
Kraft challenged that move by starting arbitration proceedings saying it had built a business worth $500 million a year.
Starbucks has to pay $2.76 billion in damages and other costs to Kraft Foods in a dispute over packaged coffee
On Tuesday the arbitrator ruled that Starbucks must pay $2.23 billion in damages plus $527 million in interest and legal costs.
Kraft Foods was spun off by Mondelez International last year and under an agreement between those two firms the payments from the case will go to Mondelez.
“We’re pleased that the arbitrator validated our position that Starbucks breached our successful and long-standing contractual relationship without proper compensation,” said Mondelez.
In a statement Starbucks said it “strongly disagreed” with the conclusions of the arbitrator.
“We believe Kraft did not deliver on its responsibilities to our brand under the agreement, the performance of the business suffered as a result, and that we had a right to terminate the agreement without payment to Kraft,” it said.
Starbucks has come under fire in China for reportedly charging locals higher prices than in other major markets.
The official China Central Television (CCTV) claimed Starbucks earns higher margins in China due to its pricing.
Starbucks is the latest foreign company to come under scrutiny from Chinese media over its pricing practices.
Earlier this year, Apple and Nestle were also put under pressure to review their prices or customer service.
Starbucks has come under fire in China for reportedly charging locals higher prices than in other major markets
Starbucks is rapidly expanding in China, which is set to overtake Canada as its second-biggest market next year.
In the CCTV report that aired on Sunday, it said a medium-size latte in Beijing costs 27 yuan ($4.43), or about one-third more than at a Starbucks in Chicago.
“Starbucks has been able to enjoy high prices in China, mainly because of the blind faith of local consumers in Starbucks and other Western brands,” Wang Zhendong, director of the Coffee Association of Shanghai, told CCTV.
Starbucks said its prices reflect higher food and logistical costs in China.
The issue became one of the most popular talking points on Sina Weibo, China’s version of Twitter, where many users seemed to rally to Starbucks’ side.
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Starbucks is set to unveil a new line of baked goods that will include yoghurt muffins, loaf cakes and even spinach croissants.
The coffee giant is hoping to expand its range of food items, which are purchased by one in three customers and generates around $1.5 billion a year in revenue.
Nine stores in San Francisco will trial the products with a view to rolling them out nationally, although there is no time frame for this as yet.
Among the items being tested are a whole wheat spinach croissant, a tomato, cheese and herb croissant, a blueberry yoghurt muffin and a raspberry passion fruit loaf cake.
Many of them will be served warm, unlike its current line-up of baked goods.
The move comes after the Seattle-based company bought small San Francisco bakery chain La Boulange in a $100 million deal in the summer.
At the time, Starbucks said it hoped to use items produced by La Boulange to popularize the French bakery experience in the U.S. like it had done with the Italian espresso.
The deal could also strengthen the firm’s position in a fast-growing segment of the restaurant industry dominated by Panera Bread Co, which offers baked goods in a seated setting.
Its current range of bagels, breakfast sandwiches and oatmeal will not be affected by the changes, it was reported by The Huffington Post.
Lisa Passe, a spokeswoman for Starbucks, said they would be handling the expansion “week by week, figuring it out”.
Other items on trial from La Boulange, which has 19 locations in the Bay Area, include a chocolate chip cookie, an almond cookie and vanilla shortbread cookie.
Starbucks says it plans to expand La Boulange into a national presence in coming years.
Earlier this year, Starbucks announced plans to attract evening trade by offering beer and wine on its menus.
The company said it planned to bring the new items to a few Chicago-area cafes by the end of 2012 and is also testing wine and beer sales in Spain.
But it did not expect to sell alcohol in all of its nearly 11,000 U.S. cafes.
Spinach is a health powerhouse.
It offers twice as much fibre as other greens and is an excellent source of beta-carotene, an antioxidant that can reduce the risk of heart disease and cancer.
It also contains lutein, which helps prevent age-related macular degeneration.
Serve raw, spinach is a good source of vitamin C, as well.
Starbucks tops the coffee charts when it comes variety: grande, hot, decaf, triple five-pump vanilla, non-fat, no foam, whip cream, extra hot, extra caramel, upside down, caramel machiato.
Beyond the thousands of flavors and orders, Starbucks will happily brag about, according to those in the know there is also a “secret menu”, one which features exclusive concoctions such as the Dirty Hippy and the Captain Crunch.
Experienced coffee drinkers have been known to stroll into a branch and order Zebra Mocha without the barista battling an eyelid, according to the people at The Daily Meal who have uncovered a slew of secret recipes.
Other flavors that have been revealed as exclusive, unadvertised combinations known by the Starbucks team include the Grashopper and the Cake Batter Frappuccino.
Anonymous online conversations between former employees and coffee obsessives are scattered around food blogs and photo sites with tips as to where to order what and how to make sure you get it.
But some say that it isn’t as simple as knowing the name if you want to ensure you get the right beverage and it helps to know the ingredients.
All combinations, of course, require nothing more than the ingredients on offer in branches of the mega-chain so a lot of the detail is in the preparation.
The Undertow Shot for instance is a hot shot of espresso layered over cold milk that is layered over syrup.
One Starbucks enthusiast who prefers his coffee this way explains on his Flickr page: “You drink it like a shot and get a hot then cold then sweet taste.”
Anonymous online conversations between Starbucks former employees and coffee obsessives are scattered around food blogs and photo sites with tips as to where to order what and how to make sure you get it
Everyone is familiar these days with a Chai latte but if you double up on the shot, the regular Chai drink is apparently elevated to off-the-menu status as a Double Dirty or Extra Dirty Chai.
Alternatively, if Dirty isn’t your style, the soy version is known affectionately as the Dirty Hippy.
The Penguin Mocha or Marble Mocha combines the white chocolate mocha with the regular mocha for those who have decision making issues.
But if what you are looking for is an extra zing there is always the option of adding raspberry flavoring for something called the Red Tux Mocha.
Fans of the cereal may be disappointed to learn that Captain Crunch does not contain sweetened corn and oats, but to many the combination of hazelnut syrup in a Strawberries and Creme Frappuccino is similar enough in flavor to earn the title.
And the list goes on.
So the next time you swing by your local branch for your regular shot of breakfast energy, think again. There may be something better than you just didn’t know about before.
Top ten most inventive “secret menu” Starbucks drinks:
• Dirty Hippy – Chai Latte with two shots and soy milk
• Grasshopper Frappuccino – A mocha frappuccino blended with java chips and peppermint syrup
• Bootleg Brulée – A white mocha with two shots, toffee nut syrup and caramel drizzle
• Zebra Mocha – White chocolate mocha with java chips and chocolate chips sprinkled in.
• Three C’s: Cinnamon dolce latte with caramel syrup and chocolate mocha syrup.
• Biscotti Frappuccino – Frappe with the biscuits bought separately and blended in
• The Penguin Mocha – A white chocolate mocha combined with the regular mocha
• Captain Crunch – Strawberries and Creme Frappuccino with hazelnut syrup
• Red Tux Mocha – A Penquin Mocha with rasberry flavouring
• The Widow Maker – Half iced black tea, half iced black coffee.
The pink color of Starbucks’ Strawberry Frappucino is thanks to crushed up insects, according to new information provided by the coffee chain giant.
In a statement released by Starbucks, the company has revealed that they use cochineal extract, which is the ground-up bodies of insects, as a dye for the popular rose-colored beverage.
Bugs from mainly Mexico and South America are dried out before they are ground and used in the milky-based Frappuccino drink.
As stomach-turning as it may sound, the ingredient is in fact harmless. Commonly used to help liven up the dull hues of jams, meats, cheese, baked goods, alcoholic drinks and more, cochineal extract has been used as a coloring agent in food and drinks for centuries.
It has been deemed safe by the US Food and Drug Administration.
The pink color of Starbucks’ Strawberry Frappucino is thanks to crushed up insects
Starbucks said it had decided to use cochineal extract to help limit the use of artificial ingredients in its products.
“At Starbucks, we strive to carry products that meet a variety of dietary lifestyles and needs,” the statement read.
“While the strawberry base isn’t a vegan product, it helps us move away from artificial dyes.”
But the all-natural matter is not entirely free of health risks.
The World Health Organization has found that cochineal extract may cause asthma in some people. Others may see an allergic reaction.
Vegan fans may not be happy with its inclusion either. ThisDishIsVegetarian.com, an animal rights and eco-friendly news site, labels the extract non-vegan.
Many of New York’ Starbucks stores employees are in open revolt after being forced to clean messes in bathrooms that have become the city’s de-facto public toilets.
An angry Starbucks employee wrote on the StarbucksGossip blog:
“I have personally cleaned up almost every humanly fluid and plenty that didn’t seem human.”
As a result, managers at some New York Starbucks stores locked bathrooms and put up “Employees Only” signs so the public could no longer used them.
Bosses from the Seattle company visited at least two of the coffee chain’s shops in Manhattan, and ordered managers to re-open the restrooms, the New York Times reported.
This doesn’t solve the complaint that lines of New Yorkers and tourists that cycle in and out of Starbucks bathrooms bring a host of nuisances, along with their full bladders.
Many of New York' Starbucks stores employees are in open revolt after being forced to clean messes in bathrooms that have become the city's de-facto public toilets
“I am continually amazed by what people will do when given a few square feet of privacy,” an anonymous barista said on the StarbuckGossip blog.
“Why do you want to have sex in a bathroom? I think the toilet would be kind of a mood killer.”
Current and former Starbucks employees reported homeless people who use the bathrooms as their own personal showers.
An anonymous New Yorker calling himself “Mister PeePee” has vowed to pleasure himself in every Starbucks bathroom in the city and rate the experience.
Starbucks coffee shops are some of the few stores in New York that don’t sport a form of a “bathrooms are for customers only” sign. Even some tourist manuals recommend Starbucks for a convenient place for visitors to empty their bladders.
New York has only 20 paid, public toilets. By contrast, Starbucks has 109 stores in Manhtattan alone.
Jesus Diaz, an assistant shift manager at the store at 87th Street and Lexington Avenue, told the New York Times employees don’t necessarily appreciate the chain’s status as a public convenience.
“Starbucks is definitely New York’s public bathroom,” Jesus Diaz said.
“It’s a little too much.”
Starbucks came in for criticism from New Yorkers after a New York Post report last week that quoted an unnamed company source saying: “Starbucks cannot be the public bathroom in the city anymore.”
Starbucks officials denied the New York Post report, saying: “We’re not closing public bathrooms at all.”
In response, corporate managers swooped in and re-opened several bathrooms, including the one at 45th Street near Avenue of the Americas that had been marked “Employees Only”, according to the New York Times.
At that store, the bathroom door has a bare spot where the sign was clearly removed.
“I have to use the bathroom, too — and we’re selling coffee!” Matthew Shakespeare, a shift supervisor, told the Times.
“There’s no place that the city provides.”