Starbucks 2012 Annual Report Download - page 21

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•The loss of key personnel or difficulties recruiting and retaining qualified personnel could adversely impact
our business and financial results.
Much of our future success depends on the continued availability and service of senior management personnel.
The loss of any of our executive officers or other key senior management personnel could harm our business.
We must continue to recruit, retain and motivate management and other employees sufficiently, both to
maintain our current business and to execute our strategic initiatives, some of which involve ongoing expansion
in business channels outside of our traditional company-operated store model. Our success also depends
substantially on the contributions and abilities of our retail store employees whom we rely on to give customers
a superior in-store experience. Accordingly, our performance depends on our ability to recruit and retain high
quality employees to work in and manage our stores, both domestically and internationally. If we are unable to
recruit, retain and motivate employees sufficiently to maintain our current business and support our projected
growth, our business and financial performance may be adversely affected.
•Adverse public or medical opinions about the health effects of consuming our products, as well as reports of
incidents involving food-borne illnesses, food tampering or food contamination, whether or not accurate,
could harm our business.
Some of our products contain caffeine, dairy products, sugar and other active compounds, the health effects of
which are the subject of public scrutiny, including the suggestion that excessive consumption of caffeine, dairy
products, sugar and other active compounds can lead to a variety of adverse health effects. Particularly in the
US, there is increasing consumer awareness of health risks, including obesity, due in part to increased publicity
and attention from health organizations, as well as increased consumer litigation based on alleged adverse
health impacts of consumption of various food products. While we have a variety of beverage and food items,
including items that are coffee-free and have reduced calories, an unfavorable report on the health effects of
caffeine or other compounds present in our products, or negative publicity or litigation arising from certain
health risks could significantly reduce the demand for our beverages and food products.
Similarly, instances or reports, whether true or not, of unclean water supply, food-borne illnesses, food
tampering and food contamination, either during manufacturing, packaging or preparation, have in the past
severely injured the reputations of companies in the food processing, grocery and quick-service restaurant
sectors and could affect us as well. Any report linking us to the use of unclean water, food-borne illnesses, food
tampering or food contamination could damage our brand value and severely hurt sales of our beverages and
food products, and possibly lead to product liability claims, litigation (including class actions) or damages.
Clean water is critical to the preparation of coffee and tea beverages and our ability to ensure a clean water
supply to our stores can be limited, particularly in some international locations. If customers become ill from
food-borne illnesses, tampering or contamination, we could also be forced to temporarily close some stores. In
addition, instances of food-borne illnesses, food tampering or food contamination, even those occurring solely
at the restaurants or stores of competitors, could, by resulting in negative publicity about the foodservice
industry, adversely affect our sales on a regional or global basis. A decrease in customer traffic as a result of
these health concerns or negative publicity, or as a result of a temporary closure of any of our stores, as well
adverse results of claims or litigation, could materially harm our business and results of operations.
•Effectively managing growth both in our retail store business and our Channel Development business is
challenging and places significant strain on our management and employees and our operational,
financial, and other resources.
Effectively managing growth can be challenging, particularly as we continue to expand into new channels
outside the retail store model, increase our focus on our Channel Development business, and expand into new
markets internationally where we must balance the need for flexibility and a degree of autonomy for local
management against the need for consistency with our goals, philosophy and standards. Growth can make it
increasingly difficult to ensure a consistent supply of high-quality raw materials, to locate and hire sufficient
numbers of key employees, to maintain an effective system of internal controls for a globally dispersed