Occam’s RazR

“Imitation is the sincerest form of television” - Fred Allen

Apparently, the producers at Good Morning America have taken a page from The Daily Show. Last night, Comedy Central re-aired the show with Larry Wilmore’s insightful and informed piece about how a down economy is destroying Beverly Hills; people are only buying new Bentleys every other year, instead of annually, and plastic surgeons are being forced to do actual reconstructive work!

On Wednesday’s GMA, the producers sent Bianna Golodryga (whose name has appeared here often enough that I don’t have to Google for spelling anymore) to intro a piece about the economy in front of a Starbucks. Paraphrased, it’s getting so bad that people aren’t buying coffee, and Starbucks is closing stores!

Let me understand… people are no longer choosing to spend $4 for a cup of coffee? This is proof of a recession? Yes, Starbucks is closing 600 stores, which is 8-percent of the total nationwide. But let me ask a couple of common-sense questions:

1. Didn’t we hear about all of those poor mom-n-pop java joints that were suffering because the evil behemoth from the great Northwest was invading?
   Actually, economic studies proved that independent coffeehouses did better when a Starbucks came into the neighborhood. It drove up the overall market for premium coffee consumption, and everyone won. So is this Starbucks retreat a sign that people aren’t buying coffee anymore? Or that they’re buying it from somewhere other than a Starbucks?
2. How much of the Starbucks retreat is really about growing too fast? How many of the 600 stores were within a half-mile of another location? A quarter-mile? Across the street?
   We’ll never know. Starbucks is very good at generating attention for itself. It is an iconic market leader, but too many people will walk away from this GMA story confusing the market-leader with the overall market. Much in the same way that US “domestic auto production” is still calculated as though Nissan, Toyota, Mercedes, Hyundai, and Honda don’t have manufacturing facilities in the United States.

I’m not digging on GMA, I just happen to to watch. But it’s clear that the standards that once reigned over network news continue to drop. Truth is a function of both fact and context - and modern television journalism provides too much of the former without the latter.

Update: the analysts apparently agree with me:

Starbucks said the 600 stores are either unprofitable now or are not expected to meet future return thresholds. All of the targeted units are close to another company-operated store, [Chief Executive Peter] Bocian said.

“This is validating some of the critics who said they were opening stores too close to one another,” said James Walsh, an analyst at Starbucks investor Coldstream Capital Management.

Those critics complained that the company had overbuilt in the United States — particularly in major urban areas like Manhattan, where it is not unusual to see several Starbucks in a single city block.

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