Buck stops here for coffee chain

BY ALEX MCDONALD

The once-ubiquitous Starbucks coffee chain has closed three inner-city outlets. The Wynyard, Darlinghurst and St James stores are among the casualties in a cull of 61 of its 84 coffee houses, resulting in almost 700 job losses around the country.

Workers at the Victoria Cross Starbucks in North Sydney, which closed last Saturday, refused to answer questions for The City News, although staff did confirm that they were bound by confidentiality agreements.

The closures were euphemistically referred to as a ‘geographical refocus’ by Starbucks management. ‘In January 2008, we developed strategies to transform the company for the future,’ Starbucks CEO Howard Schultz said last week. ‘Now, we are well into the implementation phase of transforming Starbucks and we believe that this difficult, yet necessary, decision to close stores in Australia will help support the continued growth of our international business.’

Unlike other retailers, the Seattle-based coffee chain does not use a franchise model, which means the company’s debts and exposure are far greater. The closures have not been limited to Australia, with Starbucks having also closed 600 outlets across the US and Canada.

According to the Australian Bureau of Statistics, retail sales have slumped in the past six months, with cafes and restaurants among the hardest hit.