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Starbucks is backing away from music CD retailing

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Posted Monday, 30 June 2008

I’ve been annoyed at Starbucks for awhile - it’s the CD racks, countertop displays and spinners that clutter their stores.

The Starbucks on the mauka side of Bishop and King Streets is a prime example of how this retail initiative is a nuisance to customers. That store is small - I’ve seen closets that are bigger. The CD displays make it much harder to stand in line when there’s more than 3 people waiting for a barista. I’m surprised there aren’t ADA lawsuits pending.

CDs and coffee don’t mix

I can’t imagine that the employees like dealing with these racks, either. What happens when a customer knocks over some CDs or spills a drink on merchandise? How do stores control shoplifting and shrinkage? What about teenagers and young children who decide to “play” with the packages?

Starbucks is phasing out its music CD retail business, according to an AlleyInsider.com article called Starbucks (BUX) Dumping CDs. Starbucks stores will have 4 CD slots per store.

I expect that Starbucks stores will still sell iTunes gift cards, as part of the WiFi promotional campaign for the iPhone and iPod Touch.

In addition, Starbucks has handed over the day-to-day management of its Hear music label to Concord Music Group.