2004-12-28

Reflections on Blue Sky closing

The Athens Banner-Herald finally presented the story on why Blue Sky Cafe closed. The summary it presents is that they did not generate the revenue they expected after they did an expensive remodeling job and began serving dinner and drinks, and so they did not have enough cash to operate. Whereas I and others that didn't like the change might want to say that they shouldn't have fixed what wasn't broken, their impetus to change in the first place was the fact that their sales were declining, so they were in trouble regardless. A remark from one of the owners quoted in the story is that they probably would have benefitted from a name change, so they have realized that the coffee shop's goodwill was not transferrable to new services.

What does this all mean? The article noted strong competition from Jittery Joe's. I also think that Starbucks must have had an effect because Starbucks has indeed served a lot of coffee beverages that Blue Sky could have served. It is also the case that recent economic problems of the last couple of years have caused a decline in travel and consumption of food services, so Blue Sky may have been hit by that. Perhaps if Blue Sky had stayed the course they may have seen their sales pick back up since supposedly the economy is improving now.

In summary, I would speculate that the economy and competition hurt Blue Sky. I would encourage everyone to ask themselves why they ever went to Starbucks instead of Blue Sky, which is asking why you would shun a unique local business run by people with passion for their work in favor of a corporate entity only concerned with profits for their shareholders. (I admit that I have gone to Starbucks for the brighter lighting.) I am also curious if Blue Sky was entering a market that really needed a new player when it began serving food and drinks -- maybe it moved from serving coffee in a saturated market to serving food in an even more saturated market, but I would like to hear opinions on that.

No comments: