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A sure sign the US economy is in trouble - Starbucks is closing 600 of 11,168 stores and 16 in Las Vegas alone (10 percent of all Starbucks in Sin City).
Starbucks' surge and contraction mirror the Las Vegas economy, said Keith Schwer, director of the Center for Business and Economic Research at the University of Nevada in Las Vegas. ``We've gone from having a better unemployment situation than the national economy to one that is slightly less.''
The closings ordered by Chief Executive Officer Howard Schultz, 55, will cost as many as 12,000 jobs in the U.S. The company had 172,000 jobs as of last September, according to a Bloomberg News report.
``These stores aren't performing,'' Bridget Baker, a Starbucks spokeswoman, said in an interview. ``These closures are part of our ongoing transformation.'' She declined to confirm the number of stores shown for each city on the Web site, saying the company provides only state totals.
Bloomberg points out that rising gasoline and food prices, increased unemployment and the housing slump have shackled Starbucks, just as they have Vegas itself.
Las Vegas hotel occupancy fell 2 percent in the five months through May from a year ago, dragged down by a 9.7 percent decline in nights spent by convention attendees, according to data from the Las Vegas Convention and Visitors Authority.
In Clark County, where Las Vegas is located, gambling revenue dropped 16 percent in May, its fifth straight monthly decline, and was down 6.4 percent for the year, Nevada's Gaming Control Board said July 10. Las Vegas home prices peaked in August 2006 and have fallen 29 percent since, according to the S&P/Case-Shiller Home Price Index.
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Jagajeet Chiba, Gambling911.com
