Starbucks (SBUX) Tells Walmart (WMT): "Here you Take Them!"

More great news from our wonderful service economy - a new slew of 12,000 potential Walmart (WMT) workers have just been borne. Lucky us. Of course these people will disappear into the ether of the "new jobs" created by the birth/death model in our monthly BS, err BLS unemployment report. (newest chapter of this fiction available tomorrow - hot off the presses) Within that report these people will be shown as newly employed in contruction trades, finance, or services - some of our hottest groups for job creation ;) [no, I am serious - the government has been showing in their estimates growth in construction and finance]

As always folks, I do not comment on this monthly report other than realizing it will create lemming like behavior by the hedge fund computers and NYC traders. Every 30 days I just point new readers to this [May 2: Employment Report] Read point #1 and point #2 in that blog post, and then ignore the spiel that gets spit out every 30 days. As always, listen to the companies - not the government. Let's hear what Starbucks (SBUX) is saying.

• Starbucks Corp (NasdaqGS:SBUX - News) said on Tuesday it plans to close another 500 underperforming stores and eliminate as many as 12,000 full- and part-time positions, lifting shares nearly 6 percent. (if you are new to the market this might sound perverse but all the market cares about is lower costs. Less people = lower costs. That's as simple as I can make it.)
• The company, which now plans to close a total of 600 underperforming stores versus its previous estimate of 100, said the majority of the stores will be closed by the end of March 2009.
• The job losses would represent about 7 percent of the company's global work force.

Frankly I cannot keep track of all the announced job losses anymore - whatever the aggregate amount is. It really doesn't matter - I'll just rely on what the government says and call it even. Works for everyone else ;)

In a greater sense and speaking to one of our long held themes - pooring of America - once again I ask you to please avoid any company (other than the oversold bounces that should be coming soon in retailers as overstuffed shorts are finally forced to cover and book their huge gains) directly relying on the bottom 80% of US consumers overspending of the past 15 years - i.e. $4 lattes.

[Apr 23: Consumers Fleeing Starbucks; Still Love Chipotle (CMG)]
[Jan 8: Is Starbucks (SBUX) a Buy?]
[Sep 5: Starbucks Warns on Higher Commodity Costs - this time Dairy]

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