Mandelson, in the U.S. to promote trade, dropped the "F bomb" in front of a group of journalists at a party at the home of the British counsel-general in New York. Seems he was incensed about remarks Starbucks Corp. Chief Executive Howard Schultz made on the state of the British economy on CNBC. Schultz said he was worried about the economy in Europe, and that the U.K. "is in a spiral."
"The UK is not spiraling, although I've noticed Starbucks is in a great deal of trouble -- but that might be because of their over-expansion given the state of the market," Mandelson is quoted by the Daily Mail newspaper as saying. More colorfully, he also said, "Who the **** is he? How the hell are they doing?"
Though the coarseness of his language was weird, especially considering that he is a diplomat of sorts, Mandelson is right. Schultz really should leave macroeconomic analysis to others. His attempts to analyze changing consumer trends have been disastrous.
Under his management, Starbucks appeared in many U.S. cities across the street and in some cases on the same block. Schultz seemed to think that Americans had an unyielding thirst for expensive and pretentious caffeinated beverages. Plus, he got into the music business for who knows what reason.
Starbucks is paying the price for his hubris. It's laying off baristas and closing poorly performing stores. Recently, the chain even introduced a value menu to lure back consumers. It's an ambitious strategy, one that will require more action and less talk from Schultz.