Economists use "index tools" to forecast the economy. McDonald's is one of them, and soon Starbucks may join the burger chain. The Big Mac index, named by The Economist, remains a great way to measure if a currency is under, or over weight.
Simply put, and According to Armada's Strategic Global Intelligence Report, Starbucks is a good way to determine if consumers are saving money for necessary items. I know, many say they can't survive without a non-fat, no foam, soy chai latte. But at $4.80 do you really need it?
Probably not, and that is why some are calling specialty coffee drinks a luxury item. Having the coffee giant as an index will show if people are spending money on unnecessary items. And they aren't--as much. That is why Starbucks has announced they are closing 600 stores, four here in Kansas City.
By the way, I am not a non-fat, no foam, soy chai latte kind of guy. I order the biggest cup of regular coffee I can find. This usually sets me back about $1.65, but this is a necessary purchase. Afterall, I get up at 2am to do NBC Action News Today.
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