For years, as its stores spread like kudzu across the country, Starbucks was accused of driving neighborhood coffee shops out of business. In most cases, it seems to have done exactly the opposite. In recent times, the Seattle-based company is in retreat, having closed hundreds of stores and laid off thousands of employees. But now it’s making a crafty move on its community competitors, opening new locations in Seattle that look, feel, and behave like local mom-and-pop cafes, with the Starbucks logo nowhere in sight. If these prototype “stealth Starbucks” succeed in Seattle, you may well see (or rather, not see) one soon in your city as well. [%comments]
Secret Starbucks
TAGS: business
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This is nothing new. For years Starbucks has been tried to branch out. In SF they owned a store called Circadia, and in Palo Alto another store on University Ave that has since closed.
Starbucks, of course, is a brand. And when you have a brand, you do whatever possible in order to sell it. Starbucks has that “special” appeal, and going to Starbucks becomes more than just grabbing a cup of coffee to go. Unfortunately, I see people who use Starbucks as a way to exemplify who they are as a person, in which that starbucks cup becomes just another accessory to go along with a Coach handbag.
In the past few years, have seen and experienced neighborhood coffee shops (with better coffee than Starbucks) go out of business. I have also seen Starbucks that were too close in proximity go out of business as well. These questions come to my mind when I think of Starbucks:
Will Starbucks always be around? Or is it just another fad in today’s society…..?
And what will be the next coffee that will take our society by storm…?
It sounds like Starbucks has realized that for many of us, they are not a destination. They are a pit stop because they are handy, consistent, and have clean bathrooms. Notice that their main competition these days is not the mom and pop coffee shop but McDonalds.
The only reason I think this stealth Starbucks will survive –It sells beer/wine !! The markup is huge and will probably be the major source of profit.
Starbucks is just handy if I’m in a rush. But it’s not cheap, the coffee is horrible and the food not particularly good.
They made it big in America and Asia because most people there don’t know what good coffee is. Starbucks coffee to me is bad coffee.
I suspect they’re going stealth now because people now know their offerings are not worth their hard earned cash. That and it’s no longer a ‘cool’ place to go to. There are coffee franchises popping up everywhere, most with better coffee (not the best, just better). People are going back to Mom and Pop shops or to new tea places (potentially the next Starbucks line?). Starbucks is no longer unique. Their now and have been a long time just part of the pack (I would never consider them a market leader).
That is the problem. Starbucks just don’t excite the customers anymore.
Going stealth will not solve their problems. If anything, it’s more reason for their franchisee to sell up. They can start their own coffee shop. No need to pay for a stealth brand when you can build your own.
Starbucks means terrible Miscela, bad Macinacaffe, laughable Macchina and no Mano; the most important part of good coffee.
I don’t know why everyone is so down on Starbucks. It’s not only that they’ve created a coffee culture where local stores CAN compete (thank you Freakinomics for pointing this out), they were also one of the first corporations to incorporate fair trade (even if an illusion, it set a high bar), they have a kind of Oprah book thing going, and they created a whole new job type for college aged people to complain about. They certainly haven’t done everything right, but it’s more like we’re punishing them for success than their faults. If the prices are ridiculous (yes), don’t buy coffee there, but don’t grudge them the ability to get other people to drink it.
Also, in Seattle they aren’t “trying” to look local, they are local. Big might keep them from claiming mom and pop, but it shouldn’t keep Seattle from claiming them.
Perhaps Starbucks has expanded its business to the market-saturation limit, where no more growth of the business is possible. So to keep growing and making their shareholders happy, they have to do something else.
When the economy was booming, most big companies used to go and buy another business that they knew absolutely nothing about running, (called diversification) and as a result, wreck both companies. Today the problem is different– the economy is so bad that retailers are competing with the neighborhood mom-and-pop stores to get the last crumbs from the profit table.
When I become an economist in my next life, I am going to figure out a practicable business model that allows the building of a healthy thriving enterprise, running it, and staying put.
—I, for one, welcome our Starbucks Overlords.
Anyone remember when coffee was only sold from either a Dunkin Donuts or 7-11 in styrofoam cups by scuzzy-looking guys named Eddie or Frank?
None of this high-falutin’ classy paper cups and destination stuff. You got your coffee, cigarettes, and went on.