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This is not the first crack to appear in Starbucks’ bull market façade. Back in the middle of last year, the coffee house chain came under fire for selling “high-fat and high-calorie foods that can lead to heart disease, obesity and cancer,” The Elliott Wave Financial Forecast noted that it could be the start of a large-scale attack on Starbucks’ vaunted corporate image:
As EWT noted with respect to Microsoft near its all-time high in late 1999, major peaks are followed by societal attacks against the most successful corporate beneficiaries of a bull market in social mood. So it is now with the world’s biggest coffee chain. Starbucks is “in the sights of the so-called ‘food police.’ The Center for Science in the Public Interest plans to take action against the popular coffee chain” for the high-fat products it sells.

Starbucks shares have since retreated amidst a puzzling sales setback. The January issue of The Elliott Wave Theorists explained that the fall-off in demand for sugary products and caffeine drinks that were refreshment mainstays during the long bull market is a natural consequence of the emerging downtrend:
In August, Coke’s largest bottler saw a 22 percent profit decline and warned of a “difficult” third quarter. Unilever, which sells Breyer’s ice cream and Lipton tea, reported an unusual drop in ice cream and iced tea sales in Europe over the summer. Sunny Delight, an orange-flavored soft drink that is loaded with sweeteners, became a “phenomenon” after its launch in 1998. Since 2000, however, sales have fallen sharply as consumers have become “increasingly wary.” Krispy Kreme, once a “sweet deal for investors” and doughnut [and coffee] lovers alike, has lost almost 75 percent of its value over the last year. In August, Krispy Kreme reported a 56 percent drop in quarterly profits. In a similar reversal, Starbucks shares fell sharply when sales came in way under expectations. The socionomic implications of this flight are clear: the sugar rush and caffeine buzz that kept consumers tuned in to the high-energy and social imagery of bull market are subsiding because they are incompatible with bear market psychology. Bear markets are anti-fitness, so this is not a health kick. People just don’t want to feel jazzed up as much as they used to.

At this point, the effort to unionize is very limited, but, as the headline at left suggests, it represents another crack in the public image of a company that is currently ranked No. 16 on Fortune’s latest survey of best places to work. This standing should change dramatically as the bear market asserts itself. Labor strife will also spread fast. By the time the bear market is over, this little uprising, or one very much like it, will probably be remembered as the spark that re-ignited a whole new era of employer/employee strife.