Starbucks, are you listening to yourself?

Premium coffee purveyor Starbucks (Symbol: SBUX) reported its fiscal fourth quarter results last night — that’s the calendar third quarter to you and me — and it wasn’t pretty. As we’ve been saying and saying, the company is under a massive assault from McDonalds (MCD), Dunkin Donuts and seemingly ever other retailer with a brew pot in the back. The company’s key problem, however, has already been precisely identified by founder and chairman Howard Schultz, all the way back in February! That is, in its monster grab for growth, the company lost touch with its roots and culture as a coffee house opening the door for competitors with no coffee bona fides to steal their high margin biz. And yet, here we are months later and the chain’s answer is to slow the opening of new U.S. stores over the next year by less than 10% and start running television commercials. There’s been some reshuffling of executives, no serious new blood brought in, and again a promise to introduce fewer new beverages, but that hardly seems like enough to ward off the increasing assault.

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