Tag Archives: Starbucks

The value of highlighting Starbucks, since 1971

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In a Starbucks TV commercial, I noticed the company notes it was founded in 1971. Here is a logo from their website that highlights 50 years of business:

Starbucks.com

The company’s website highlights their heritage:

Our story begins in 1971 along the cobblestone streets of Seattle’s historic Pike Place Market. It was here where Starbucks opened its first store, offering fresh-roasted coffee beans, tea and spices from around the world for our customers to take home. Our name was inspired by the classic tale, “Moby-Dick,” evoking the seafaring tradition of the early coffee traders.

Ten years later, a young New Yorker named Howard Schultz would walk through these doors and become captivated with Starbucks coffee from his first sip. After joining the company in 1982, a different cobblestone road would lead him to another discovery. It was on a trip to Milan in 1983 that Howard first experienced Italy’s coffeehouses, and he returned to Seattle inspired to bring the warmth and artistry of its coffee culture to Starbucks. By 1987, we swapped our brown aprons for green ones and embarked on our next chapter as a coffeehouse.

Starbucks would soon expand to Chicago and Vancouver, Canada and then on to California, Washington, D.C. and New York. By 1996, we would cross the Pacific to open our first store in Japan, followed by Europe in 1998 and China in 1999. Over the next two decades, we would grow to welcome millions of customers each week and become a part of the fabric of tens of thousands of neighborhoods all around the world. In everything we do, we are always dedicated to Our Mission: to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time

Fifty years is likely a safe point to highlight a founding date as it is a nice round number, a half century. Sure, 49 or 51 years gets at the same idea but it does not have the gravity of 50. Yet, I could imagine two sides to whether promoting this date is helpful.

On one side, fifty years is a long time. Many businesses do not make it this far. Even fewer companies are so long for so many years. Highlighting the date implies permanence, tradition, stability. Starbucks is not just a passing trend; they are good at what they do, they have been around five decades, and hope to be around for many more.

On the other side, Americans tend to like upstarts and novelty. Does fifty years imply old age and lack of innovation? Starbucks is established while other successful companies are offering new models and products. There are Starbucks locations everywhere but once companies like Sears or Woolworths also thrived.

Even as the company celebrates 50 years, companies are not permanent. Perhaps there is a time when fast food in general no longer exists or people can get similar food products at home. Or, Starbucks does something internally that causes issues. Or who knows what. Does it reach 75 years or 100 years, other round milestones worth celebrating? It is hard to know now; Starbucks will keep going until it doesn’t.

When America’s unofficial third place closes 400 locations

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If Starbucks is an important third place for Americans to gather and interact, what happens when the company closes 400 stores because of COVID-19 and to focus more on drive-through and carry-out business?

business cafe coffee dark

Photo by Abhinav Goswami on Pexels.com

Starbucks announced on Wednesday that it will close 400 of its roughly 10,000 locations in the U.S. and Canada over the next 18 months as the company projects to lose up to $3.2 billion in sales this quarter due to the ongoing coronavirus pandemic. It’s not exactly a retrenchment. The company plans to end this year with 300 more stores than when it started, even accounting for the closures—but that’s half of what the chain had originally been planning. About 40 to 50 of the new locations will only offer pickup or drive-through.

Starbucks typically closes about 100 stores every year due to leases expiring and market conditions. The decision to up that number signals that Starbucks expects the recovery from the current recession to extend far into the new year. The company did not list which locations it plans to shutter, though it did say that they would be in “high-social gathering locations” like campuses and malls. Shares for the company fell by 4 percent in midday trading as the news broke. “As we navigate through the COVID-19 crisis, we are accelerating our store transformation plans to address the realities of the current situation, while still providing a safe, familiar and convenient experience for our customers,” Starbucks CEO Kevin Johnson said in a press release.

While nearly all of the company’s cafés have reopened in limited capacities without in-store seating, the twin health and economic crises continue to discourage consumers from spending and venturing out to public spaces. The shock to Starbuck’s business model has reportedly accelerated its shift to focusing on takeaway service, which it had already been planning to do before the pandemic. In November, the company opened its first Starbucks Pickup store at Penn Plaza in New York City, where customers order and pay through their phones. While Starbucks locations have long served as a “third place” where people could meet and relax, customers in recent years have been placing more and more orders for takeout, perhaps due to the company’s recent focus on mobile ordering. The company estimates that 80 percent of its orders at company-owned stores in the U.S. are to-go. Now that the virus has made people even less likely to dawdle at cafés for an extended period of time, Starbucks expects that percentage to rise.

The new stores will emphasize the use of Starbucks’ ordering app, Uber Eats, walk-up windows, and curbside pickup to facilitate social distancing. Some store layouts will also begin including pickup counters that exclusively cater to mobile orders and food delivery services. The company hopes that large U.S. cities will eventually host a mix of cafés and pickup locations that are located within walking distance of one another in order to reduce crowding.

For a long time, the presence of a Starbucks has denoted a particular status for an area or community. Will the loss of a Starbucks or even the shift from a place one can sit and gather to one that sends food and drinks out the doors and windows harm communities?

Even without COVID-19, this hints at the limited public realm Americans have where fast-food places are some of the popular places people can or will gather. Starbucks presented this possibility though as a private business they still aim to make money and will restrict certain behavior. As the article notes, this shift may have already been underway; I noted the busy Starbucks drive-through early this year on a rare work session at a local store.

Welcome in Amazon, look for other businesses to follow?

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Amazon will soon open a new facility in Palatine, Illinois and get a tax break to do so. That is normal. This other part caught my attention: the suburb hopes Amazon’s arrival helps spur more development.

Amazon will move into a warehouse and distribution facility under construction off Hicks Road south of Northwest Highway, and Palatine officials hope the online retail giant’s arrival sparks more development in that industrial area.

“This is a good bit of news for us, for sure,” Mayor Jim Schwantz said Monday. “It’s the right kind of use for that area. It’s a light draw on our services. It’s not going to take a ton of water. It’s not going to take police or fire calls. We know Hicks Road is built to be able to handle the additional traffic.”

Lots of communities want Amazon to move in. They bring jobs, they fill warehouses, and they bring a big name. Just remember all the cities that put together plans to try to allure Amazon HQ#2.

But, this is another dimension of having a successful company move into your community: it could lead to further growth. Having Amazon puts you on the map. Companies could choose from dozens of warehouse or manufacturing locations in the Chicago region. But, if Amazon is already there, this may attract other firms. Success begets success, growth leads to more growth.

Another example, perhaps two decades in the making: suburbs and neighborhoods all wanted a Starbucks. Not only would this bring in sales tax revenue and more shoppers. It put a place on the map. It suggested the place was cool enough, was up and coming or had an established set of well-off residents. Starbucks could pave the way for other similar businesses that would bring in or provide for a certain crowd.

Or, think about headquarters. These facilities may not have that many employees or may just be an office building but being home to headquarters, as opposed to branches or locations, is something special. Headquarters attract headquarters. They signal something.

A typical Amazon facility is not going to be flashy. It is not going to attract many visitors or shoppers. However, it will add to a community’s tax base, provide jobs, and help the community say they are home to one of the most important companies in America. That Amazon distribution center may be the start to something greater.

Can Starbucks be a third place when its drive-through is so full?

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Starbucks aspires to be a third place, a setting where people of different backgrounds can gather in between home and work. Coffee shops, and restaurants more broadly, can play this role as people need to eat and drink and such activity is often tied to social interaction.

In my morning commute, I pass a Starbucks in front of a strip mall and right next to a busy suburban road. The drive-through line is always very full. The size of the line is particularly noticeable in this location because once the Starbucks line has more than eight cars, it spills over into the roadway through the shopping center and can block traffic.

The inside of this location is attractive. A month ago, I spent a morning working there. The store had dark walls and what looked like a tin ceiling plus a variety of seating options (tables, upholstered chairs, work counters). A steady flow of people came in and out and there were at least a few others like me hunkered down for several hours doing work. From my working location inside, all morning I could see the steady flow of people going through the drive-through.

Can a coffee shop or any restaurant so dependent on drive-through traffic for business (think McDonald’s) truly be a gathering spot, a social space, a third place? Perhaps the issue is much bigger than Starbucks:

1. Businesses do need to make money. Starbucks has encountered this problem before with people and visitors who might restrict or limit sales. Not having a drive-through is a bold statement but might not be financially viable (or might not generate the kind of revenue Starbucks desires).

2. The suburbs require driving (and many Americans seem to like it this way). Starbucks locations in denser settings do not have drive-throughs and perhaps they can better function as third places.

3. American fast food combines the ability to drive and getting food quickly. Without a drive-through, Starbucks is both missing out on business and putting itself into a different category of place.

4. Americans in general may not like third places given their preferences for single-family homes and private dwellings alongside their devotion to work. Any business or restaurant trying to fight against this may not make much progress. Even if people come to Starbucks or similar locations, how many engage with the people around them as opposed to focusing on their own work or interacting with a companion who came with them or who met they there? Public spaces where people come together are rare.

Maybe Starbucks can only be a third place in a certain kind of location with denser populations and less reliance on cars. Or, perhaps Starbucks can never really be a third place in a society dominated by driving and quick food.

Starbucks as a symbol of wealth in a community

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Starbucks is planning more stores in less wealthy neighborhoods:

Starbucks plans to open or remodel 85 stores by 2025 in rural and urban communities across the U.S. Each store will hire local staff, including construction crews and artists, and will have community event spaces. The company will also work with local United Way chapters to develop programs at each shop, such as youth job training classes and mentoring…

Starbucks opened its first community store in Ferguson, Missouri, in 2016, two years after the riots that broke out over the shooting of an unarmed black 18-year-old by a white police officer. It has added 13 more locations since then, including stores in Baltimore, Chicago, Dallas, New Orleans and Jonesboro, Georgia. Another one will open this spring in Prince George’s County, Maryland. Starbucks estimates the shops have created more than 300 jobs…

Kelly said the stores reflect Starbucks’ core belief in responsible capitalism. The coffee shops are profitable, he said, and have the same menu as regular Starbucks stores…

“I can’t think either of a retailer, especially one that has more of a discretionary, higher-end purchase, being willing to push into neighborhoods and markets that have less purchasing power,” Theodos said. “Starbucks usually appears when a neighborhood has the purchasing power to support it.”

For years, Starbucks has been a brand and presence that signals a wealthier location. With their prices, products, and aesthetics, communities had to have a certain level of resources for Starbucks to locate there. Once the money was there, Starbucks might arrive in droves. (I’m thinking of the number of Starbucks on Michigan Avenue in Chicago.) If payday loan stores and dollar stores help identify poorer locations, Starbucks may be the most common restaurant that signals the opposite.

I am curious about one item of information from the article. The Starbucks executive quoted in the story says the locations are profitable. Does this mean Starbucks avoided these locations for so long even though they could have made money or did something change in the cost equation over time? Some firms would want to expand everywhere to bring in money though others might want to protect their status.

Naperville has 11 Starbucks locations

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The recent move of the downtown Naperville Starbucks to a larger location led to a quick mention of the numbers of Starbucks’ location in the suburb:

A favorite place to stop for coffee is on the go in Naperville as two of the 11 Starbucks stores in the city are preparing to move.

Naperville has collected many accolades over the last two decades (see earlier posts here, here, and here) and this may be another one: having this many Starbucks suggests the community has a certain level of wealth and quality of life. Certain businesses can set a community apart and many suburbs would love to have multiple Starbucks not just for the money they generate (think of the drip, drip, drip of sales tax revenues) but for the prestige they confer.

Here are the locations according to Google Maps:

StarbucksNaperville

Not surprisingly, the majority are located along major transportation corridors: Route 59, Ogden Avenue, and 75th Street.

Is Starbucks really a “third place”?

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Starbucks CEO Howard Schultz likes to claim his stores operate as “third places,” a term coined by sociologist Ray Oldenburg. But, do they really fill this role?

Now that so many street corners seem to have a Starbucks, has the international chain truly become that “place on the corner” where people connect? In fact, Oldenburg dismisses the Starbucks coffee shop as an “imitation”, debilitated by the company’s pursuit of that other quintessentially American obsession, security, and the sterile, predictable environment it produces. “With its overriding concern for safety,” Oldenburg told Bryant Simon, author of Everything But the Coffee: Learning about America from Starbucks, “it can’t achieve the kind of connections I had in mind.”

Walk into a Starbucks today, and you may not notice much connection going on: some customers come in chatty groups, but many others arrive in search of nothing more than a place to open their laptops and get some work done; in effect, using Starbucks not as a third but a second place — their workplace. Most simply grab their coffee and go, never pausing to avail themselves of the chairs and couches provided, while others prefer to keep human interaction to an absolute minimum by using the drive-through window, a resoundingly un-urban feature Starbucks introduced in 1994.

Starbucks’ ongoing retooling and experimentation suggests that Schultz, for all he talks about his company’s resurrection of the “third place”, has yet to hear a sufficient amount of political banter and schoolchildren’s chatter in his stores. Starbucks’ enormous scale and need to service the American demand for frictionless convenience contradicts its mission to replicate the appeal of continental coffee-house culture: how much of a neighbourhood-rooted venue for chance encounter can you provide when you have to run thousands and thousands of them, making sure they all do more-or-less the same thing?

Maybe you could make a case either way. In favor, coffee shops serve as third places in numerous cultures and their presence almost everywhere means Americans have a common place outside their private homes and workplaces to get together. Yet, Starbucks present a common “McDonaldized” experience (it may be coffee but it is still fast food and often dependent on a car-driven society) that is primarily controlled by corporate interests. Perhaps only in a society that is so privatized (emphasis on single-family homes, cars, moving away from urban problems, individualism, etc.) could a chain coffee store even make the case that it is about community.

Differences at the Starbucks inside the CIA

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Starbucks might be ubiquitous in busy American places but the location within CIA headquarters has some key differences:

“They could use the alias ‘Polly-O string cheese’ for all I care,” said a food services supervisor at the Central Intelligence Agency, asking that his identity remain unpublished for security reasons. “But giving any name at all was making people — you know, the undercover agents — feel very uncomfortable. It just didn’t work for this location.”…

The baristas go through rigorous interviews and background checks and need to be escorted by agency “minders” to leave their work area. There are no frequent-customer award cards, because officials fear the data stored on the cards could be mined by marketers and fall into the wrong hands, outing secret agents…

Because the campus is a highly secured island, few people leave for coffee, and the lines, both in the morning and mid-afternoon, can stretch down the hallway. According to agency lore, one senior official, annoyed by the amount of time employees were wasting, was known to approach someone at the back of the line and whisper, “What have you done for your country today?”…

“Coffee culture is just huge in the military, and many in the CIA come from that culture ,” said Vince Houghton, an intelligence expert and curator at the International Spy Museum. “Urban myth says the CIA Starbucks is the busiest in the world, and to me that makes perfect sense. This is a population who have to be alert and spend hours poring through documents. If they miss a word, people can die.”

Starbucks may market itself as a modern “third place” but in this particular case, this is an anonymous service business. I wonder how much Starbucks had to pay to get this contract…

Chicago second in nation, fifth in world for Starbucks

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Chicago is a world leader in Starbucks, even if it is sometimes insecure about its place on the world stage:

Chicago is home to 164 Starbucks, ranking the city second in the United State behind New York City–and fifth in the world, according to Starbucks store data compiled by Chris Meller.

There are 64 locations in an area bounded by DesPlaines, Oak Street, Congress Parkway and Navy Pier. That’s 40 percent of the city’s total…

At O’Hare International Airport alone, there are 17 Starbucks locations, including spots in baggage claims, terminal concourses, food courts and near gates.

The South Side has only nine stores south of 33rd Street. There are no Starbucks on the West Side–at least none west of Ashland.

The common factors behind the Chicago locations seem to be the wealth and number of tourists in different locations. In other words, Starbucks tends to locate where there are more people with more money to spend on coffee. This may be a little different than the vision the store promotes for serving as a “third place” – these third places are for certain kinds of neighborhoods.

How long should customers be able to stay at a McDonald’s?

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McDonald’s has been part of some recent controversy over how long customers should be able to stay:

In the past month, those tensions came to a boil in New York City. When management at a McDonald’s in Flushing, Queens, called the police on a group of older Koreans, prompting outrage at the company’s perceived rudeness, calls for a worldwide boycott and a truce mediated by a local politician, it became a famous case of a struggle that happens daily at McDonald’s outlets in the city and beyond…

McDonald’s is not alone in navigating this tricky territory. Last year, a group of deaf patrons sued Starbucks after a store on Astor Place in Lower Manhattan forbade their meet-up group to convene there, complaining they did not buy enough coffee. Spending the day nursing a latte is behavior reinforced by franchises like Starbucks and others that seem to actively cultivate it, offering free Wi-Fi that encourages customers to park themselves and their laptops for hours…

“As long as there have been cities, these are the kind of places people have met in,” said Don Mitchell, a professor of urban geography at Syracuse University and the author of “The Right to the City: Social Justice and the Fight for Public Space.”…

But the leisurely cafe culture and the business plan behind fast food are in opposition. Although signs hang in many McDonald’s stores instructing customers to spend half an hour or less at the tables, Ms. McComb said there was no national policy about discouraging longtime sitting. “The individual franchisees do what they feel is best for their community businesses,” she said. “In the case of Flushing, that franchisee welcomed those guests for years, and it was only when other customers felt they were no longer welcome that he attempted to adjust the visit time with the customers.”

Are these businesses solely for profit or do they also function as social spaces? Clearly the latter is true to some degree, particularly in a country that tends to lack many public spaces or a culture of cafes and pubs. When there are few other places to go, particularly for the economically disadvantaged who have less ability to carve out private spaces (whether big houses or their own cars), why not make a McDonald’s or a Starbucks into a third place between home and work? Going even further, could it be that McDonald’s is one of the few public places that will take you in if you have little?