The ratings on Seattle-based Starbucks Corp. are based on Standard&Poor's Ratings Services' expectation that good performance will continue despite the still-challenging economy as the company benefits from operational improvements and product development. We view Starbucks' business profile as satisfactory, reflecting its leading market position and excellent brand recognition in the specialty coffee market. However, we view this industry segment as vulnerable to economic downturns and tightening in discretionary spending; it is also increasingly competitive as many players are introducing better quality coffee products. Following weak sales in 2008 and 2009, Starbucks' performance has demonstrated consistent improvement. Good operating momentum has continued throughout the first three quarters of 2011, with comparable-store sales of 7% for year-to-date July 3, 2011
