The Starbucks Economy

Back in 2009, I wrote to you all about the Starbucks Index; the SBUX is an “everyman” indicator of how the economy is faring. But why? Because buying that piping hot cup of eye-opening deliciousness every morning comes at a cost. With an average, per-customer, per-visit spend of about 5 bucks, that money represents a big chip out of the weekly allowance for the average American. Back in 2009, during the throes of the recessionary months, $25.00 a week on coffee was an easy place to cut costs when financial worries and woes were running high.

Fast-forward to 2013, (hard to believe that four years have passed since then) and the SBUX is running at an all-time high, trading at $68.32 per share. This is quite a turnaround from 2009’s $7.06 per share. (If you had the wherewithal to pick up Starbucks stock at under $10.00 per share, please don’t gloat.) Things have picked up so much at your local Starbucks that they even felt confident enough with current demand to raise the price on your morning cup by about 1 percent this past June.

What does all of this Starbucks hoopla actually mean? Well, if you take it from Jonathan Last of the Philadelphia Inquirer, it means that if things are looking up for Starbucks, then things are looking up for most Americans, small businesses and the economy as a whole.

Confirming the positive sentiment, businesses are hiring again and revenues continue to climb year-over-year. While the increases are not as great as the spikes in the past 2 years, the mountain back to sustainable growth was not as great as in previous years. It has been a long haul, and although there is still much work to be done, we should all take a brief moment to stop and acknowledge one heck of a comeback and enjoy the Venti Café Americano.