Is Howard Schultz On Track?

During Starbucks’ investor conference yesterday Chairman Howard Schultz declared that the US economy is in a “tailspin” and introduced a number of ways that his company is going to combat this environment. This is the first big step by Starbucks founder Schultz since he returned as head of the company at the beginning of the year.Starbucks will start offering a customer-rewards card, a new brewing system for its coffee and is reportedly rolling out a new line of health and energy drinks for its customers, among other initiatives. The company’s first-quarter same-store sales released earlier this year inched up 1%, and management announced that it will cut back its global store openings to 2,150 new stores this year from 2,500 in 2007.Will these new initiatives help the coffee king? From what we’ve been able to tell so far in this economic downturn, discount chains, wholesale clubs and grocers are succeeding. Is Starbucks going down a path that will lead to similar results that others will soon copy? Or is the chain hurting from overexpansion?