Starbucks

Article Review
By: Johnny Page
 The following article review focuses on three recent articles pertaining
to Starbucks. The first article is a recap of the recent lawsuit brought against
Starbucks in New York City. The second article is a preview of the earnings
report for the fourth fiscal quarter that is expected to be released by the
closing bell on Thursday. The third and final article
A 76-year-old New York resident, Moltner, spilled a cup of hot tea,
which she purchased from Starbucks, on herself. The spill caused Moltner to
undergo multiple skin grafts. She spilled the hot tea when she tried removing
the lid from a “Venti” sized cup. The spill burned her leg and part of her foot.
During her hospital stay she suffered several more injuries including, bed
sores and a herniated disc caused by a fall out of bed.
Moltner accused Starbucks of serving tea that was too hot in a double
cup- one cup placed inside another- that was defectively designed. She also
claims that Starbucks should have warned her that the tea was so hot. The
appeals court recognized “double cupping” as a common and acceptable way
to prevent burns throughout the industry. Moltner’s lawyer, David
Jaroslawicz said, "The other side presented an old lady knocking over her tea.
The case was really about that Starbucks has a directive to employees that
you should not double-cup because it changes the center of gravity and can
cause the cup to tip over."
This was not the first case brought against a restaurant concerning
spilled drinks. In perhaps the most famous and best-known case, a jury in
1994 ordered McDonald's Corporation to pay $2.86 million to Stella Liebeck,
an Albuquerque, New Mexico, woman who said she scalded herself with the
restaurant's coffee. The parties later settled.
This case never really gained the momentum that many thought it
would in the wake of the 1994 case. This lawsuit had many of the same
characteristics that the McDonalds case had, however, it was the courts
finding that Starbucks had no further responsibility to the customer.
The second article is focusing on the earnings reports that are going to
be released on Thursday of this week. Starbucks has been battling growing
competition from fast-food chains such as McDonalds, whom now offer fancy
coffee drinks. In this most recent quarter, Starbucks has tried to set itself
apart from their competition by offering free Wi-Fi, which kicked off in July.
The partnership with Yahoo gives Web surfers in stores exclusive content,
such as free e-books and access to sites such as Wall Street Journal, which
normally cost money. Starbucks also released a new product line called “Via”
which offers coffee on the go. The coffee is freeze-dried so that all a user has
to do is add hot water for an instant cup of coffee.
Upon the closing bell on Thursday, a Starbucks representative is
expected to discuss both the new product line and the effects of free Wi-Fi on
the earnings. UBS analyst David Palmer now expects revenue at stores open
at least a year to rise by 7 percent, up from his prior estimate of 6 percent.
That's a key figure for the industry because it measures growth at existing
locations.
Investors are keeping a close eye on the corporation’s turnaround after
the recession-induced drop in sales. This is the third quarter since Howard
Shutz’s return to the company and all sings are pointing to a full recovery.