{"id":11929,"date":"2007-12-28T12:27:46","date_gmt":"2007-12-28T19:27:46","guid":{"rendered":"http:\/\/hill-kleerup.org\/blog\/wp\/2007\/12\/28\/the-starbucks-effect.html"},"modified":"2014-11-07T09:11:33","modified_gmt":"2014-11-07T16:11:33","slug":"the_starbucks_effect","status":"publish","type":"post","link":"https:\/\/hill-kleerup.org\/blog\/2007\/12\/28\/the_starbucks_effect.html","title":{"rendered":"The Starbucks Effect"},"content":{"rendered":"
\"\" <\/div>\n

The assumption is that Starbucks is like Wal-Mart — when one moves in, all the independent competitors in the area get hosed.  Instead, it looks like the opposite<\/em> is true<\/a>:  a nearby (even neighboring) Starbucks is good <\/em>for business for smaller operators (except to the extent that they buy up all the good locations).<\/p>\n

\n

Soon after declining Starbucks’s buyout offer, Hyman received the expected news that the company was opening up next to one of his stores. But instead of panicking, he decided to call his friend Jim Stewart, founder of the Seattle’s Best Coffee chain, to find out what really happens when a Starbucks opens nearby. “You’re going to love it,” Stewart reported. “They’ll do all of your marketing for you, and your sales will soar.” The prediction came true: Each new Starbucks store created a local buzz, drawing new converts to the latte-drinking fold. When the lines at Starbucks grew beyond the point of reason, these converts started venturing out\u2014and, Look! There was another coffeehouse right next-door! Hyman’s new neighbor boosted his sales so much that he decided to turn the tactic around and start targeting Starbucks. “We bought a Chinese restaurant right next to one of their stores and converted it, and by God, it was doing $1 million a year right away,” he said.<\/p>\n<\/blockquote>\n

Not that Starbucks isn’t a ruthless competitor — nor above dubious tactics to sink the competition — but in general the publicity, the development of a larger local coffee-drinking clientele, and the opportunistic comparison that indy coffee shops enjoy all make the net effect, generally, a positive one.  And a big reason is that Starbucks isn’t actually any tastier, or cheaper, than its competitors — just more recognizable and ubiquitous.  And it actually operates at a disadvantage in terms of local promotions and non-standard goodies and the like.<\/p>\n

\n

In other words, a new Starbucks doesn’t prevent customers from visiting independents in the same way Wal-Mart does\u2014especially since coffee addicts need a fix every day, yet they don’t always need to hit the same place for it. When Starbucks opens a store next to a mom and pop, it creates a sort of coffee nexus where people can go whenever they think “coffee.” Local consumers might have a formative experience with a Java Chip Frappuccino, but chances are they’ll branch out to the cheaper, less crowded, and often higher-quality independent cafe later on. So when Starbucks blitzed Omaha with six new stores in 2002, for instance, business at all<\/em> coffeehouses in town immediately went up as much as 25 percent.<\/p>\n<\/blockquote>\n

A rising coffee cup floats all cafes …<\/p>\n","protected":false},"excerpt":{"rendered":"

The assumption is that Starbucks is like Wal-Mart — when one moves in, all the independent competitors in the area get hosed.  Instead, it looks like the opposite is…<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","_seopress_robots_follow":"","_seopress_robots_imageindex":"","_seopress_robots_snippet":"","_seopress_robots_primary_cat":"","_seopress_robots_breadcrumbs":"","_seopress_robots_freeze_modified_date":"","_seopress_robots_custom_modified_date":"","_seopress_robots_canonical":"","_seopress_social_fb_title":"","_seopress_social_fb_desc":"","_seopress_social_fb_img":"","_seopress_social_fb_img_attachment_id":0,"_seopress_social_fb_img_width":0,"_seopress_social_fb_img_height":0,"_seopress_social_twitter_title":"","_seopress_social_twitter_desc":"","_seopress_social_twitter_img":"","_seopress_social_twitter_img_attachment_id":0,"_seopress_social_twitter_img_width":0,"_seopress_social_twitter_img_height":0,"_seopress_redirections_value":"","_seopress_redirections_enabled":"","_seopress_redirections_enabled_regex":"","_seopress_redirections_logged_status":"","_seopress_redirections_param":"","_seopress_redirections_type":0,"_seopress_analysis_target_kw":"","_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[35,722,38],"tags":[],"class_list":["post-11929","post","type-post","status-publish","format-standard","hentry","category-big-business","category-coffee","category-food-drink"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":8851,"url":"https:\/\/hill-kleerup.org\/blog\/2006\/04\/05\/doubleshot_to_t.html","url_meta":{"origin":11929,"position":0},"title":"Doubleshot-to-the-head","author":"***Dave","date":"Wed 5-Apr-06 9:33am","format":false,"excerpt":"Despite the term \"doubleshot\" being generic for, well, a double shot of espresso in a coffee, Starbucks has sent a Cease-and-Desist against the Doubleshot Coffee Company in Tulsa for ostensibly...","rel":"","context":"In "Big Business"","block_context":{"text":"Big Business","link":"https:\/\/hill-kleerup.org\/blog\/category\/big-business"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2756,"url":"https:\/\/hill-kleerup.org\/blog\/2002\/09\/25\/and_the_chain_w.html","url_meta":{"origin":11929,"position":1},"title":"And the chain will set you free","author":"***Dave","date":"Wed 25-Sep-02 9:44am","format":false,"excerpt":"Indepedent coffee houses often tremble and protest when Starbucks, like the Star Wars Empire, moves into town. But, remarkably enough, Starbucks may actually be increasing the business for independent coffee...","rel":"","context":"In "Big Business"","block_context":{"text":"Big Business","link":"https:\/\/hill-kleerup.org\/blog\/category\/big-business"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":8969,"url":"https:\/\/hill-kleerup.org\/blog\/2006\/03\/14\/java_jive_7.html","url_meta":{"origin":11929,"position":2},"title":"Java jive","author":"***Dave","date":"Tue 14-Mar-06 6:00pm","format":false,"excerpt":"Free tall drip coffees at Starbucks on Wednesday, 10-Noon. For those who want to fight the crowds for Starbucks drip coffee....","rel":"","context":"In "Coffee"","block_context":{"text":"Coffee","link":"https:\/\/hill-kleerup.org\/blog\/category\/food-drink\/coffee"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":33359,"url":"https:\/\/hill-kleerup.org\/blog\/2013\/04\/27\/unfortunately-im-stuck-with-a-starbucks-at-my-office.html","url_meta":{"origin":11929,"position":3},"title":"Unfortunately, I'm stuck with a Starbucks at my office","author":"***Dave","date":"Sat 27-Apr-13 11:04am","format":false,"excerpt":"I would so go here. \u00a0(h\/t +Mark Means)Reshared post from +M Monica #DrWho \u00a0What an awesome coffee shop.\u00a0 View this post on Google+","rel":"","context":"In "~PlusPosts"","block_context":{"text":"~PlusPosts","link":"https:\/\/hill-kleerup.org\/blog\/category\/blogging\/plusposts"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":12284,"url":"https:\/\/hill-kleerup.org\/blog\/2008\/06\/09\/a_starbucks_city.html","url_meta":{"origin":11929,"position":4},"title":"A Starbucks City","author":"***Dave","date":"Mon 9-Jun-08 2:27pm","format":false,"excerpt":"I'm a bit disappointed by the map out of Google Maps look-up \"denver colorado starbucks.\" I think it's just incorrect or has gaps. I would be willing to swear...","rel":"","context":"In "Coffee"","block_context":{"text":"Coffee","link":"https:\/\/hill-kleerup.org\/blog\/category\/food-drink\/coffee"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.hill-kleerup.org\/blog\/images\/starbucks-denver.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":41619,"url":"https:\/\/hill-kleerup.org\/blog\/2014\/04\/07\/half-double-decaffeinated-half-caf-with-a-twist.html","url_meta":{"origin":11929,"position":5},"title":"Half double decaffeinated half-caf, with a twist","author":"***Dave","date":"Mon 7-Apr-14 9:44am","format":false,"excerpt":"Some interesting data mining here from Starbucks as to what people order (besides \"a cup of coffee\").(The title above is from one of my favorite scenes in L.A. Story - http:\/\/www.imdb.com\/title\/tt0102250\/quotes?item=qt0307493 .)Reshared post from +The WireStarbucks\u2019 analysts looked at hundreds of millions of transactions at the chain\u2019s coffee shops across\u2026","rel":"","context":"In "~PlusPosts"","block_context":{"text":"~PlusPosts","link":"https:\/\/hill-kleerup.org\/blog\/category\/blogging\/plusposts"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/hill-kleerup.org\/blog\/wp-json\/wp\/v2\/posts\/11929","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hill-kleerup.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hill-kleerup.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hill-kleerup.org\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/hill-kleerup.org\/blog\/wp-json\/wp\/v2\/comments?post=11929"}],"version-history":[{"count":1,"href":"https:\/\/hill-kleerup.org\/blog\/wp-json\/wp\/v2\/posts\/11929\/revisions"}],"predecessor-version":[{"id":47212,"href":"https:\/\/hill-kleerup.org\/blog\/wp-json\/wp\/v2\/posts\/11929\/revisions\/47212"}],"wp:attachment":[{"href":"https:\/\/hill-kleerup.org\/blog\/wp-json\/wp\/v2\/media?parent=11929"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hill-kleerup.org\/blog\/wp-json\/wp\/v2\/categories?post=11929"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hill-kleerup.org\/blog\/wp-json\/wp\/v2\/tags?post=11929"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}