Devoted to Managers and those that seek to improve their management skills

With Starbucks (SBUX) about to release their August sales figures on Thursday, investors and other businesses are looking at the results to get an indication of where consumer behavior is headed. With July 2006 being their slowest month since December of 2001, some are concerned about whether this will be a continuing pattern or just a bump in the road that is connected to a hot summer.

With same-store sales being one of the major barometers of retail success, analysts are saying that they are expecting Starbucks to grow between a 4 and 5 percent range for August.

I think that using Starbucks as a measuring rod is actually a good idea if their demographic is similar to yours. If people start cutting back there, they will probably cut back on other discretionary spending. If that seems to be the case, we may need to look at ways to respond to the potential threat.

As Ragen MacKenzie, analyst John O'Brien says though, "I'd need at least three months to make a conclusion ... right now I don't think consumers are necessarily pulling back on their purchases of Starbucks, I haven't seen any data that convinces me that people won't continue to pay $3.50 for their morning pick-me-up."

He's right. If this month slows down, it probably is too soon to say it's time to take some action. If, on the other hand, it does the same next month, we will need to take a hard look to determine if this will be something that is going to last awhile.

Whether it does or not, the major point I'm making here is that because of Starbucks being all over the U.S., its one means we can use to measure whether something is happening within that customer base. We could use it as an early warning signal. Not only that, but other public companies that serve the same demographic could be closely watched to see if it is trending in the same direction across various products and services.

It seems that this could be another tool we could add to our measuring process to give us another piece of the overall puzzle of consumer spending.