The stock of coffee retailer Starbucks (ticker symbol SBUX) was down nearly 9% on Friday after it announced results that showed a rise in its quarterly profit, but a lowered forecast for the fiscal year. Starbucks' CEO confirmed that store traffic was down, the first time the company had admitted that.< p>

By noontime Friday, SBUX shares hovered a bit above $22, about 45% off the stock's all-time high.

Despite seeming to be on nearly every other street corner in major cities, Starbucks has expanded at an aggressive pace that has long had observers wondering if new SBUX stores would at some point cannibalize the sales at existing locations.

Starbucks CEO Jim Donald dismissed those concerns, but also admitted that the coffee seller was feeling the effects of the sluggish U.S.economy, and said that it and the company's price increases this year had "impacted the frequency of customer visits to our stores." SBUX is also trimming its store expansion plans in light of the slowing economy.

Donald also said that the company would begin its first ever national TV ad campaign to try to attract more customers.

Besides facing the slowing economy, Starbucks is having to deal with more competition from other companies that are upgrading their coffee offerings. The privately held Dunkin Donuts has been rolling out cappucino and latte offerings at its stores, and even burger palace McDonald's has begun offering "premium" coffees, which actually received higher scores that Starbucks on some consumer taste tests.