A new Starbucks every four hours
October 26th, 2006 | by mbhunter |As if we couldn’t already see a Starbucks (NASDAQ:SBUX) from every point on the planet, they want to make sure that we don’t have to go too far out of our way even then. The ubiquitous coffee chain wants to caffeinate us all through 40 thousand stores worldwide — more than three times the number of stores up already.
Lauri Skinner, a senior vice president overseeing store development, said: “Going to the other side of the street can be a barrier.”
Sorry, I don’t get this. Granted, I seek out coffee because I’m addicted, and I’m not choosy, but I don’t think I’m ever going to be so lazy that I’ll think, “You know? That coffee does smell good, and I’m basically a decaffeinated puddle on the ground right now, but it’s three hundred feet away! And ACROSS the street!! Forget it!”
I also think that Chairman Howard Schultz’s statement that “this is still the opening act for Starbucks” is optimistic. Giving up gourmet coffee by the cup is an easy way to plug a hole in your spending. Personal finance authors have trademarked this factor
8 Responses to “A new Starbucks every four hours”
By Candice on Oct 27, 2006 | Reply
Have you seen Lewis Black’s riff on Starbucks? What group of people needs a Starbucks across from a Starbucks? Alzheimers patients. It’s a classic.
You just gotta love that Lewis Black.
By Dus10 on Oct 27, 2006 | Reply
Alright, this is crazy.
However, I can understand this in isolated circumstances (i.e. Huge Cities). This is already the case, though, in most of those situations. Chicago, New York, Seatlle, Los Angeles and London already have Starbucks across the street from each other.
Still, there are plenty of SBUX stores out there that you may not even realize they exist. I don’t work for SBUX, but I do some work for them through a company that I contract for (on the side), and they are in just about every decent sized hotel in downtown Indianapolis, not to mention the other stores that are easily seen just by walking down the street.
Have these guys ever taken an economics class? You go for the “low hanging fruit” first, then you tackle some other opportunities… but there is a point where the scale of economies works against you and it take twice the effort to do half the work, when expanding. I would think that they have hit that point in the US, for the most part.
By Kelly on Oct 27, 2006 | Reply
This article also attracted my attention, being a Starbucks employee. Expansion seems impossible until you see the loyalty of their customers first-hand. Check out my take on it ~ http://www.studentoffinance.com/2006/10/26/40000-starbucks-stores/
By Jerry Kindall on Oct 31, 2006 | Reply
As you might have seen in the article, part of the issue is that existing stores are often busy. When you have a store that’s so busy that customers are leaving, you put up another one nearby.
And, yeah, plenty of people wouldn’t cross the street for a cup of coffee but would occasionally stop in for a cup if it was convenient. Not all people are addicted to the extent that they’ll go any distance for their fix. I’m a casual consumer of coffee myself. When I worked in a building without a Starbucks (though there was one nearby), I never drank Starbucks coffee. Now that I do work in such a building, I stop in once every month or two.
Others like coffee, but aren’t picky about brand. I am not picky about the brand myself either. If I get a jones for coffee, I’ll just get whatever’s most convenient, which may be Tully’s or SBC or some other brand. So, it’s to Starbucks benefit to have as many stores as possible so I’ll be more likely to choose one of theirs. (Since I mentioned it, SBC is another way Starbucks can expand, as they own that company. While I’m not, there are enough people who are brand-sensitive that putting an SBC across the street from a Starbucks might make good sense.)
So anyway, between the too-busy stores and the casual and non-brand-sensitive consumers, I don’t doubt that there is room for even more growth.
By mbhunter on Nov 1, 2006 | Reply
Good comments!
I’m not particularly picky about coffee but there’s one truck stop in PA that I swear I will never get coffee at again. It was absoluely horrible, luke-warm, watery, and bitter.
But cheap is good. I can put down 65c Sheetz coffee as easily at $2 SBUX.
By denon on Nov 6, 2006 | Reply
While you’re absolutely right – overpriced coffee should be the first thing to go, it probably won’t be. People see their favorite gourmet coffee-made just the way they like it- as a cheap or regular pampering. I’d venture to guess that 75%+ of the white color working force feel that they work too hard/too much/etc, this is their way spoiling themselves. Maybe they’re right, maybe they’re not – either way, sbux wants to be around to profit from human nature.
By Savvy Steward on Nov 18, 2006 | Reply
I love coffee and I do enjoy going to Starbucks occasionally to have a cup and to read a good book for a few hours. I agree that there are a lot of Starbucks, literally on every corner, but hey if they can make a profit more power to them.
By Victor Dwyer on Jan 9, 2007 | Reply
Hi out there,
Do any of you know how Starbucks actually chooses its locations? Or more specifically: Does it have a litmus test for where it won’t/will locate? The flip side of having two across the street is that some respectable-enough-looking neighborhoods get completely bypassed. Anyone have any insights into, or references to other sources that might have looked at, how Starbucks decides a neighborhood makes its cut…is it the look of a hood? the average income? the demographic makeup? Perhaps another way of putting this: Are there neighborhoods where Starbucks might make an okay dollar (especially as it finds itself supersaturated in the neighborhoods where it’s locating franchises across the street from each other) but where Starbucks just wouldn’t deign to locate, for reasons having to do with its own cachet? And I don’t mean just inner-city war zones. I’ve noticed hoods that aren’t totally done up, but home to a fair number of yuppie latte lovers, and also fairly full of non-brand coffee shops, but that for whatever reason — a streetscape that isn’t fully spit-and-polished yet? a population that hasn’t hit Starbucks’ tipping point of desirability? — is Starbucks free.Love to hear any insights, or pointers to those (academics? sociologists? urban theorists?) who might have them.
Cheers as I sip on my homemade morning cuppa bulk-bought beans,
Victor in Canada