Innovation in Recessions

Starbucks claims to have had several.

Q: Was the decline due to the recession, or was it Starbucks failing to gauge consumers?

A: There was a dramatic change in consumer behavior. On a parallel track, Starbucks has to assume responsibility for decisions that were made. There were self-induced mistakes. But the last quarter (first fiscal quarter of 2011) was the best quarter in our 40-year history. When our back was against the wall, we were able to do our best work.

Q: In the depths of the recession, was there a moment you thought the Starbucks empire could implode?

A: I don't want to seem arrogant, but I always believed that Starbucks would be able to weather the storm. We certainly had challenging moments. But there was not one single moment when I thought we couldn't overcome the challenges. I have a book coming out at the end of March about the last two years of our transformation, Onward: How Starbucks Fought for Its Life without Losing Its Soul.

Dating the Recession

I was asked by the local newspaper to comment on the recession. Has the recovery begun locally? The article is here, and my thoughts are here.

Semantics

Definitions matter. Talking about levels versus changes, or why economists are often misunderstood. NYTimes: Most Americans Don’t Think Recession Is Over

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Finances Altered?

I believe the findings of this survey, support what I have been saying.

"This new survey points to a profound shift in the way people think about their saving and spending," said Eric Eve, senior vice president of global community relations at Citi. "The current economic environment is altering, perhaps permanently, the way we think about spending money."

The Peak

NBER calls the peak. Again, they peg the peak of the cycle to the peak of the employment series.

Some reports are suggesting all of 2009 will be slow. If that is the case, this will be the longest recession since the depression. it remains to be seen if it is the deepest. I guess the business cycle is alive and well. Here is the employment series for the region.