Starbucks warns of challenging 2008

Starbucks, the largest coffeehouse company in the world, has warned of a challenging 2008. The company, which has a total of 13,168 stores worldwide, said that it will be affected by a slowdown in consumer spending.

The group posted a 35% increase in quarterly profits but lowered sales and earnings forecasts for 2008 after a fall in US customer visits. In addition, the group said increasing dairy costs would also dent the company’s bottom line.

For the July-September quarter, Starbucks reported net earnings of $158.56 million (£77.6 million). Following the news, the company’s shares declined on concerns that US consumers will visit a cheaper place for their morning coffee.

However, the coffee chain plans to open a further 2,500 stores in its 2008 financial year, 100 less than it original intended.

The first Starbucks opened in Seattle, Washington in the early 1970’s and was named after the first mate in the novel Moby-Dick.

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