Can Starbucks Weather a Recession?

When a recession hits, luxury brands tend to take a hit. Consumers need to buy food, pay for a place to live, and buy other necessities. But nobody really needs fancy clothes, spa services, designer handbags, expensive watches, or jewelry. That type of discretionary spending generally gets cut back or eliminated entirely when shoppers feel the economy tightening.

Based on that reasoning, fancy coffee would seem a likely casualty in any potential recession. That would put Starbucks (NASDAQ: SBUX) at risk if the United States economy were to contract.

But here's a case for why that's not necessarily how things will actually play out.

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Source Fool.com