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[July 19, 2008]

The last latte: Starbucks closing Rio Grande St. store as part of downsizing

(Victoria Advocate (TX) (KRT) Via Acquire Media NewsEdge) Jul. 19--Is one Starbucks enough for Victorians? The coffee giant thinks so.

But Alice Summa, who lives in south Victoria, needs her Starbucks fix. She comes to the store at 1301 E. Rio Grande St. at least once a day for the refreshing passion tea.

"I'm addicted to passion tea," said Summa, a University of Houston-Victoria student. "I love it."

If the Rio Grande store closes as scheduled by the first half of 2009, Summa would have to drive across town to the Starbucks at 7105 N. Navarro St. With rising gas prices, she may have to cut down her passion tea intake --a thought that brought pain to her face's expression on Friday.

The Rio Grande store is one of 56 Texas Starbucks stores closing. The company announced on July 1 that about 600 stores would be closing nationwide partly because of a softening U.S. economy, a company spokesperson wrote in a news release. The company operates 7,087 stores.

Throughout the decision-making process, CEO Howard Schultz kept consumers and affiliates updated via letters on the Starbucks Web site.

"Poor real estate decisions that were made, coupled with a very troubled economy, convinced us that these stores would not reach acceptable levels of profitability," Schultz wrote in a July 8 post.

Seventy percent of the stores scheduled to close opened just in the past two years. The Rio Grande store opened in August last year. Field teams used criteria including current economic trends to identify stores that wouldn't provide "acceptable returns in the foreseeable future," the release stated.

Each store on average employs 20 full-time and part-time positions, which could mean up to 12,000 layoffs. The company regrets the disruption in the the lives of its "partners," but seeks to build the business in the long term, the release stated.

Carlos Carrasco, a server from Victoria, couldn't believe the word of all the closures at first.

"Starbucks is so popular," he added.

The 20-year-old comes to his neighborhood's store on Rio Grande at least three times a week for his favorite caramel macchiato with extra caramel. Although it would be more inconvenient to drive across town, he'll do so to get his coffee.

"I like coffee better than gas," he added. He'd rather skimp on movies and shopping than his Starbucks.

Melissa Galvan, a medical equipment sales manager from Victoria, doesn't agree. She believes premium coffee should be a treat.

"It gets kind of pricey," she said. "I would rather spend money for gas."

Galvan thinks Starbucks opened too many stores in Victoria too quickly. She got used to Starbucks as ordinary, where as four years ago she would go to Houston and feel excited about a trip to Starbucks.

"I would go, 'Starbucks!' and my eyes would light up," she said.

Tara Bozick is a reporter for the Advocate. Contact her at 361-580-6504 or tbozick@vicad.com.

To see more of Victoria Advocate, or to subscribe to the newspaper, go to http://www.thevictoriaadvocate.com.

Copyright (c) 2008, Victoria Advocate, Texas
Distributed by McClatchy-Tribune Information Services.
For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

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