Here’s an interesting question to consider: are big chains like Starbucks and Wal-Mart actually as harmful to mom and pop shops as common wisdom dictates? Not so fast, says Temple University prof Bryan Simon, who tells Reuters that that it least when it comes to Starbucks (sorry, Wal-Mart), the assumption is flat wrong:
“‘In fact, Starbucks created the market for the small coffee shop,’ says Bryant, whose new book ‘Everything but the Coffee: Learning about America from Starbucks’ is due to be released in October.
Simon argues that 20 years ago you couldn’t find a ‘good’ cup of coffee anywhere, until Starbucks came along and ‘created a desire and a taste for specialty coffee’ that eventually gave birth to the corner specialty coffee shop.”
So the guy’s got a book to sell, and those kinds of statements make headlines because they fly in the face of what most entrepreneurial types believe to be true. But what do you think? Does the argument hold water? For once we’ll refrain from commentary until you weigh in. More tomorrow…
Freaking out over the imminent closure of your local Starbucks? You’re apparently alone among our readers. This week’s survey asked whether you’d get hysterical if your local ‘bucks was on the list of the 600 stores they plan to shutter in the coming months. According to media reports, in some cities people have launched “Save our Starbucks” campaigns and are pleading with corporate not to close their corner store. We asked if you’d joined the melee. Your response? Um, no. Reader Mahesh says:
“I’d be pretty disappointed if the Starbucks near my workplace closed, because I like the people that work there and the coffee is pretty good (either that, or I’m used to the way Starbucks brews its beans). However, there’s a Starbucks not too far away that has terrible service and less-than-stellar coffee. I would shed not a tear if it went away.”
So much for brand loyalty!
By now we all know that Starbucks is in trouble. In an effort to stave off more losses, they’ve introduced a new brew, revamped their stores—and even kicked breakfast sandwiches to the curb (that eggy odor overwhelms the sweet smell of Joe, apparently).
But they’re only now starting to roll out the real secret weapon: the $11K Clover coffee machine. Here’s all you need to know about the Clover: it makes one of the best cups of coffee you’ll ever have, some experts say. Previously used only by indy coffee houses and high-end coffee shops, Clover machines attracted Starbucks’ interest last year, and Starbucks eventually bought the whole company last summer.
So could the Clover actually help boost business? Wired magazine even goes so far as to ask: “Can the $11,000 Clover Machine Save Starbucks.”
To which we ask: can any one change help a struggling business with a myriad of problems?
Maybe. In Starbucks’ case, while there have been complaints about the taste of the coffee (burnt), that doesn’t seem to be the main reason people aren’t patronizing them as much. Nor does that fact that it’s gotten too far away from its “roots” as a coffeehouse, as CEO Howard Schulz seems think. People who look for that experience were already going to small, independent coffee houses anyway. Anecdotally, the primary problem seems to be that Starbucks grew too much, too fast. That combined with a dip in the market that left some people wondering whether it really makes sense to drop $4 on a frappucino have probably done more to damage the business than the burnt coffee ever has.
That said, consumers tend to flock to novelties—at least temporarily. Do you think the Clover could have any measurable impact on Starbucks’ business?
In many ways, the announcement a few weeks ago that Starbucks is closing 600 of its stores is a victory for small business. After years of small coffee shops complaining that that the coffee behemoth was swiping business from them—Starbucks has finally gotten its comeuppance. Given that the stores are closing, it also seems clear that consumers aren’t feeling the same Starbucks love they did for years either. Whether that’s because they’re tightening their belt by forgoing $5 frapps, or because their passion for triple venti lattes has waned is unclear.
The bottom line, though, is that Starbucks is hurting from a decline in sales.
Despite that, the Wall Street Journal reports that there’s a growing group of Starbucks’ fanatics who are leading the charge to keep their Starbucks from closing after the list of doomed stores was released last week. Says one woman quoted in the piece:
“‘Now that it’s going away, we’re devastated,’ said Kate Walker, a facilities manager for software company SunGard Financial Systems who recently learned of a store closing in New York City.”
Really? Devastated? But, oh no, she’s not alone. Consumerist points out that there’s even a [low-rent] website called “Save Starbucks” where devotees can sign a guestbook proclaiming their love for the company. But given all the bad press Starbucks has received over the years, and the finger pointing by small coffee shop owners and hipsters, one wonders whether these fanatics actually exist—and if they’re really en masse?
Let’s hear from you. What do you think about Starbucks these days? And would you be peeved—or worse—if your corner Starbucks closed? Or did you already patronize the indy shop down the street anyway? Free triple pump no-fat non-caf latte from our local Starbucks (which hasn’t closed) to the person with the most impassioned answer.
Uh oh! Despite all those efforts (and dollars spent) by Starbucks to retool their image and serve better Joe, the coffee behemoth is still hurting. A lot. The company plans to close more than 600 stores and to slash its workforce by 7%, reports the Wall Street Journal today. For those of you keeping count, that’s 500 more stores than they’d originally planned to close.
By now you’ve heard that Starbucks is in the midst of an image revamp led by CEO Howard Schultz (new tile bar! new Clover coffee machines! Pike Place Roast!). We’ve been covering it with some interest, primarily to address whether an overhaul can actually help bump sales for the struggling coffee behemoth. So far, I’ve personally been unimpressed with the changes, but then I never noticed that the odor of the toasted breakfast sandwiches (which were 86ed for that reason) overwhelmed the frangrance of the coffee anyway.
Starbucks announced the next phase of its revamp today by finally launching FREE Wi-Fi in its 7,000 shops nationwide.
While it’s fantastic that Starbucks customers no longer have to pay out to T-Mobile to use the Internet, Starbucks still hasn’t gotten it right. The problem is that not only are they about three years behind other coffee shops, but they don’t make it simple enough. Here’s how it works at most espresso joints: you buy coffee, you go live. At Starbucks, you first have to purchase a Starbucks Card and put a minimum of $5 on it. Then (yes, there’s a next step) you have to register online for their Rewards program, which gives you two free hours a day. While they give you a coupon for a free drink, in order to maintain your account you have to use the card once a month, and the two hours of Wi-Fi have to be used all in one go. If that sounds like a mouthful of caveats, rules, and restrictions, it’s because it is.
What is Starbucks thinking? Here’s the bottom line, Starbucks, I don’t want to join your rewards program, and I don’t want to have to buy a card and register it online. I just want to get a cup of coffee and get on the Internet quickly to check my email—which means given the option, I’ll just go to the coffee shop next store. To me this just illustrates the magnitude of the disconnect Starbucks has not only with its customers, but with what other, smaller coffee shops are already doing.
Thoughts, anyone? Did Starbucks manage to screw this up, or is it a step in the right direction?
What’s up with big corporations going after small businesses and non-profits over dubious trademark infringements? If there’s actual trickery involved, and a company is looking to capitalize off the success of an established brand, then fine, sue ‘em into next week. But increasingly it seems like big business is going after the little guy just because they can. Here’s a couple examples from just this week:
Offender Number One: Starbucks. Apparently as a part of its continued effort to reclaim its glory days, the struggling coffee giant is after a local Seattle roller derby team over its logo. The problem? Apparently the round logo, two stars, and sans-serif font. While the two logos do look suspiciously similar, it’s not exactly like the Rat City Rollergirls are slinging carmel light frappucinos. According to the Roller Derby League’s lawyer:
“The Starbucks lawyer said that the girls on the roller derby team look scary, and she didn’t think, in her own personal opinion, [that] Starbucks would want to associate themselves with the scary characters of Rat City Rollergirls.”
Offender Number Two: Johnson & Johnson. Slashdot reports today that Johnson & Johnson lost a recent lawsuit against the American Red Cross—a charity—over its use of the red cross logo. Apparently Johnson & Johnson was frustrated because the Red Cross was using the cross on products it pimps out to the public (has anyone really seen “Red Cross” brand ointment in their local store?). Says the Red Cross’ mouthpiece:
“For a multibillion-dollar drug company to claim that the Red Cross violated a criminal statute … simply so that J&J can make more money, is obscene.” (via the International Herald Tribune)
It seems like these stories pop up every week. What do you think? Should corporations back off trademark cases when the other business isn’t a competitor or are they right to fight tooth and nail ?
Been to Starbucks recently to check out the changes? This week,
my local Starbucks wrapped up its remodel. Yet despite the new tile bar, the new Clover machines, the new Pike Place blend, the new logo, and the lack of hot food—not much seems different. The beans still taste burnt and it’s still the quickest, if not most reliable, place to get a caffeine fix in town—the McDonald’s of coffee. What it’s not is cutting-edge.
Unfortunately, that’s not what founder Howard Schultz wants to hear. Schultz regained control of the company as CEO this year after profits and stock prices continued to drop, and commissioned changes that included the recent remodel of stores. Today’s Wall Street Journal profiles
Schultz and his near-evangelical quest to revamp Starbucks. While it’s obvious that Schultz is scrambling to recapture Starbucks’ glory days, the article also implies that there’s more than just a little desperation at Starbucks HQ:
“‘We are going to bring this company back!’ Mr. Schultz practically shouted at a meeting with managers in New York in April. The idea of skeptics that the battered stock won’t recover is ‘total bull-‘ he said, his voice rising.”
The plan for the coming months is to introduce a new “Italian sorbet-like treat” and healthier food items. But the question remains whether any of these efforts actually can revive Starbucks and bring back the days when its stock was worth $40 a share. As it stands right now, the changes haven’t hit the mark. Image via Businessweek