Whatever is good for General Motors Starbucks, is good for the US economy.

I cannot think of any US companies that have been able to build a brand that has become so ubiquitous. And in the manner in which they have done it. Think about it. When was the last time you saw a Starbucks ad or flier in the newspaper offering a discounted price on a cup of coffee to get you into the store? What if Target or Best Buy could generate increased store traffic week after week without those fancy colorful 12 page Sunday circulars? It just can’t be done. The American economy is built on advertising and promotion. However, their strategy is to blanket an area with retail stores and forgo the advertising. Or at least it was.

Has Starbucks become the new American icon?

Here in Pasadena I count 9 freestanding Starbucks stores to only 3 McDonald’s. Some of the stores are so close you can walk from one to the other. However there may be storm clouds brewing. Starbucks introduced this week a national TV campaign and indicated that sales growth may be slipping. Other fast food competitors see the margin to be made in a $2.00 cup of coffee and who better to go after than the company that created it. Is the sale of a single cup of coffee impacted by competition or by the economy?

Has the Housing Market affected Starbucks?

A slowing housing market impacts many industries. It may not be felt immediately but over time its bound to catch up. Consumers have a choice to make in the morning. Spend $3.50 on a jumbo half caf, double down latte or buy a gallon of gas. Spend $4 for an extra espresso shot or buy a gallon of milk. There comes a point when external forces place too much financial pressure on the American consumer, then they step back and say UNCLE. No mas. Enough already.

Could this be the scenario in the housing market? Are consumer’s saying prices are too high, and homes are unaffordable? The price of money is fairly inexpensive and thereby the housing market should be much more bullish if past history would be any indication. Consumers may just be feeling uneasy about the economy and thereby avoiding a 30 year commitment in the form of a mortgage.

As we drift into unchartered water, consumer buying habits may become harder to predict. Gas prices previously flirted with $3.50 to $4.00 a gallon, but last time we had a housing market. Oh well, enough analysis for the evening. It’s getting late and if I am going to finish my other projects tonight, I need a cup of coffee.

Tags: Pasadena home sales, pasadena housing market