Starbucks, Haagan Dazs Find Opportunity in Economic Downturn

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Restaurants have generally taken a hit lately as more consumers pinch pennies and cook at home. But a weak economy doesn’t have to be all bad news, and a few chains have been finding clever ways to turn the situation to their advantage.

Landlords, for example, are eager to hold onto their tenants, and Starbucks has been using that fact to push for better deals. “We are reaching out to all landlords globally to look for opportunities to renegotiate rents under our leases,” CEO Howard Schultz said during January’s earnings call. “We are eager to work with landlords to find solutions that are mutually beneficial.”

The company has declined to give details, but Bloomberg just reported that Starbucks landlords have received letters asking for as much as a 25 percent rate reduction.

Haagan Dazs, meanwhile, is hoping that the favorable terms being offered for real estate will encourage potential franchisees, thus boosting the company’s expansion plans.

And McDonald’s is scooping up discounted advertising, particularly in local markets, where media outlets are dropping their rates in an attempt to lure back advertising dollars.

What I’m waiting for, though, is for food companies to start brazenly exploiting another effect of the recession: a rise in snacking. According to a recent survey, stress over the economy is causing people to eat more junk food between meals. Comfort foods, take note.

Tags: Food, Starbucks Corp., Food & Beverage, Manufacturing, Katherine Glover

Katherine Glover is a Minneapolis-based print, radio and online journalist. She's written for Salon.com, Sierra Magazine and many others, and she does a weekly blog on immigration issues for MinnPost.

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1

cadelson

06/04/09 | Report as spam

RE: Starbucks, Haagan Dazs Find Opportunity in Economic Downturn

With the obesity epidenmic single-handedly bringing our healthcare system to it's knees, it is brazenly irresponsible and unethical to encourage or even suggest that food companies exploit our recession-driven increase in snacking by advertising "comofort foods" (which are by definition, unheatlhy). Our children will already be the first generation to die sooner and have a worse quality of life than their parents due to the health complications of obestiy. Thus, we can't "afford"(even in jest) for food companies to advertise unhealthy "comfort foods"--they already do this too much already! For there to be a reasonable future for America's children, youth and adults, we need food companies to advertise healthy snacks (fruits and vegetables) and we need a nationwide reductrion in the price of organic fruits and vegetables. The latter could be accomplished by stopping government subsidies for pesticide-laden and genetically modified produce (70% of produce we consume), and rerouting these subsidies to organic and local farming inititatives instead. Carol Adelson, RD, MS
2

leroydecker

06/04/09 | Report as spam

RE: Starbucks, Haagan Dazs Find Opportunity in Economic Downturn

I hope that these Mega food companies are being benevolent in their negotiations but as far as the brazenly taking advantage of our snacking habits to deal with stress, McDonald's already has the "Snack Wrap". To there credit they do offer some apple wedges for an alternative in the kid's meals. I think these Mega food companies are way way ahead of the curve on this topic. I think our major problems are our habits. We can educate, educate and educate the public on the benefits of eating more whole, unprocessed foods which means more fruits and vegetables but habits are hard broken. Take for example the tobacco industry. EVERYONE knows the horrible health risks involved with smoking but people are still lighting up. It's half-baked but it still happens. Am I drawing a relationship to addictions with foods...maybe.