Recession brewing: FIVEbucks to close 600 stores

The best indicators of an economic recession aren't always found on Wall Street.
(For the record there are three Starbucks locations on Wall street.)
I'm not saying the Big Board isn't an indicator, of course; it's just somewhat more complex.
Me, I prefer to look at consumer spending on elastic goods.
Coffee, for most of us, is an elastic good unlike water or gasoline. Demand for those goods stays relatively static in spite of flucuations in price.
Demand for coffee, 5-dollar coffee specifically, does change.
Disposable income, for many of us, is a contradiction in terms and businesses that prey on what's left over of our incomes are feeling the crunch.
The closing of nearly 600 Starbucks locations may not be entirely indicative of the harsh economic landscape in this country and elsewhere. One could argue that the corporation stretched its beans far too thin. But I digress...

Here is the report from MarketWatch:

Starbucks to close 600 U.S. stores, cut 12,000 jobs

By Matt Andrejczak, MarketWatch
SAN FRANCISCO -- Starbucks Corp., dragged down by a slowing U.S. economy, is pulling the plug on 600 of its underperforming U.S. coffee shops and trimming the number of stores it had planned to open over the coming year.
The shutdowns, starting now and running through March 2009, are far more than the coffee-shop chain had originally planned. In January, Starbucks said it planned to close 100 U.S. stores as part of the transformation plan set in motion by Howard Schultz shortly after he returned as CEO.
The move will eliminate 8% of the roughly 7,250 stores operated by Starbucks and cut 7% of its global workforce, or as many as 12,000 employees. The stores, the majority of which are located near another Starbucks, were opened from 2006 through 2008.
Combined, the stores aren't profitable and are spread across major U.S. markets.
"We believe we've improved the profit potential of the U.S. store portfolio," Starbucks Chief Financial Officer Pete Bocian said in a conference call.
Starbucks has admitted it was stung by the subprime mortgage mess in California and Florida, states that make up almost a third of the company's U.S. retail revenue. This hurt profits and foot traffic at its U.S. stores. Starbucks reported operating profit in its U.S. business fell 27.5% for the quarter ended March 30 from last year.
Under Schultz's leadership, the Seattle company grew at a frenzied pace following its IPO in June 1992. But last year, rapid expansion looked to be catching up to Starbucks and Schultz returned to spearhead a plan to improve the company's slowing U.S. business.