STEVE INSKEEP, host:
Now, the high oil prices are pushing up costs throughout the economy; not just gas and air fares, but products at Starbucks. No, we're not talking about the coffee. It's the plastic lids on the coffee cups. They're made from petroleum. And that's going to be added trouble for the coffee company, which saw its stock price dropped five percent on Wall Street just yesterday. That's after the stock finished 2007 with its worst ever performance.
From Seattle, NPR's Wendy Kaufman has more on why investors are souring on Starbucks.
WENDY KAUFMAN: Once a darling of Wall Street, Starbucks has had a rough year. For a long time the company seemed immune to conventional economic factors. But as Bear Sterns suggested in a new report to investors, that is no longer the case. And the Wall Street firm lowered its rating on the stock from outperform to peer perform compared to others in the restaurant industry.
Another analyst, Nicole Miller of Piper Jaffray, echoed the view that today's weak economy is a major reason for the stock's decline.
Ms. NICOLE MILLER (Senior Research Analyst, Piper Jaffray): I think what surprised all of us was that we thought a certain category of concepts would be resilient to economic pressures when the fact of the matter is what was once considered sort of an everyday convenience has really become a luxury for a lot of people now.
KAUFMAN: Moreover, Starbucks must contend with higher dairy prices and it may be feeling the impact of competition from McDonald's and others who are improving their coffee offerings. But don't count the company out. Starbucks, which has more than 15,000 stores worldwide, is expanding rapidly abroad, where the economics look rosier.
Wendy Kaufman, NPR News, Seattle.