For the first time ever—and spurred largely by two price increases in a year—customer traffic at Starbucks dropped last quarter. The coffee chain still reported earnings based largely on higher prices and new stores, but it’s worried enough about the falling traffic to launch a national television ad campaign this season, something it’s never done before.

Starbucks’ Chief Executive said that the chain’s 2008 earnings forecast does not factor in a price increase, although we’re not sure how to take that. (Maybe he’s just hinting that they can beat their forecast with $9 cups of coffee!)

Although the falling traffic proves even Starbucks is vulnerable to the economic downturn, it doesn’t mean they’ve shelved their scheme to take over the world: the CEO announced that they’re moving ahead with plans to open 10,000 new stores over the next four years, although they’re reducing the number opening in the U.S.

“Starbucks reports 1st traffic drop as shares fall” [Reuters]
(Photo: Steve Webel)

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