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Why I Hate Starbucks

11/05/07 @ 04:12:38 am, by Kate Hopkins Email 3339 views • Categories: Starbucks

It's not for the taste of their coffee, which is "meh" at best.

It's not for the fact that they sell milk shakes disguised as "morning beverages".

It's not even for the fact that they sell a lifestyle, more than a product.

No, what drives me crazy about Starbucks is their belief that they should be eveywhere, even if it comes at the cost of other coffee shops.

I live in West Seattle. At last count, we had close to a dozen coffee shops/places that sold espresso drinks in a three block radius. Demand is high for the dark brew and those who open a shop will and can find an market for their wares.

There have been two coffeeshops closures over the past year. One place shut down because they were in a bad location and marketed themselves equally poor (it was sort of a bike-shop/coffee shop that I never quite understood). I did not know the owners of this location at all

I did know of the owners of the second coffeeshop that had closed. My roommate knew them better than I and it is through her that I found out this story. Consider this story anecdotal as I have no firsthand account of either side of the story. I'll leave it up to you if this is plausible, let alone accurate.

About a year ago, they had purchased an established coffeeshop called Infinity Espresso. Their location was at a small plaza is anchored by a drug store at one end, and a Safeway supermarket at the other. The rest of the plaza is peppered with the types of stores that one often finds in these locations - a smoke shop, a UPS store, a nail salon.

This coffeeshop wasn't as popular as the other nearby locations, but it did bring in money, and the owners were satisfied with their investment. They could clearly pay their lease and still have enough to make a small living off of the place.

Fast forward a year to the current day. Starbucks is now in the location where this small business once occupied. So what happpened?

Important to note in all of this are the two new shopping centers being built in the area. The land in the area has clearly raised in value and no doubt that commercial space in any of nearby locations has also gone up in cost.

But an inability to pay the higher costs wasn't what forced Infinity Espresso out. Starbucks, was simply willing to pay more than the going rate. When Infinity Espressos lease came up for renewal, the management of the plaza simply chose to not re-sign them. They kicked out Infinity and put in a Starbucks.

A year ago, out of the dozen or so coffeeshops, there was only a small presence by Starbucks, a tiny little stand at the Safeway.

Now they have three locations, with their third location taking over a spot already established by a smaller operator.

Dont' get me wrong, I blame the plaza Management as well. But it seems as if there was some collusion between Starbucks and the plaza prior to the end of Infinity's lease.

And that what sucks about the whole thing.

Because even if you're moderately successful, and have set your business up in a location where high growth is expected over the coming years, it doesn't guarantee anything. It seems as if there's nothing preventing a multi-national corporation from coming in and making promises of higher leases and/or extended contract lengths, not to mention selling the plaza management of the "value added" of having said multi-national parking themselves in the plaza.

So now, instead of a local small business being given the opportunity to become really popular, we have a plaza increasing their value by a small percentage, Starbucks adding yet another store to the thousands that already exist, and one small business owner kicked to the curb - simply because they were in a space that Starbucks wanted for themselves.

Explain to me how Starbucks are the good guys again? Because right now, I only see yet another corporate bully.


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Comments, Pingbacks:

Comment from: zack [Visitor] Email
Who ever said they were the good guys? Business is business and like most huge companies, it's all about the profits. They'd be foolish to not try to push out the smaller shops. Not that I promote these practices, but that's life.
PermalinkPermalink 11/05/07 @ 05:20
Comment from: Derrick Schneider [Visitor] Email · http://www.obsessionwithfood.com
Zack is right: Like it or not, that's just business. Starbucks may not be making much more from their new coffee shop, but they're making more than they were when someone else was in that space.

You're a big advocate of free market economies, Kate; isn't this just a basic example?
PermalinkPermalink 11/05/07 @ 05:36
Comment from: tim [Visitor] Email
I also have a problem with blaming starbucks here. Property values have risen and smaller businesses just scrapping by can't afford the a) higher rent or b) higher properties taxes that come along with it. And there are companies that are willing to pay higher then the going rate. Should the property owner just ignore that?

I've witnessed a half dozen local businesses get uprooted when the lease ends. Some get replaced with chains others small businesses that are willing to pay more.
PermalinkPermalink 11/05/07 @ 05:44
Comment from: Kate Hopkins [Member] Email · http://www.accidentalhedonist.com
I'm a fan of the free markets when they benefit the consumer, but I fail to see how the consumer is being served here. Starbucks isn't replacing a failing business, nor are they introducing a new service to the area, and they certainly aren't adding any innovative products to a market that is already well served.

So how does the introduction of Starbucks add anything of value to my neighborhood? One could argue that the plaza property will seen as more valuable, but this is Seattle, where plazas and mini-malls are equally seen as a blight.

So.. where's the value?

As far as free markets are concerned, I'd argue that in order to be a free market, Infinity would have to be offered the same deal that Starbucks eventually settled on. Then they could have declined or accepted the offer and life would have moved on.

But that's not what happened. By all accounts, Infinity simply wasn't offered an extension to their lease. It seems as if Starbucks simply wanted their location, and the plaza management company never gave the owners of Infinity to counter Starbucks offer. That's what bothers me so.
PermalinkPermalink 11/05/07 @ 05:59
Comment from: Jes [Visitor] Email
There are four Starbucks within a short walking distance of me. There is also one inside the mall down the road, as well as one outside the mall. Nearly every grocery store and Target here has a Starbucks inside. The Supertarget has one inside and a massive Starbucks in the adjacent parking lot. Any "indie" coffee houses closed down because they either get pushed out or lose business. To me that smacks of too much bully than just friendly competition. I understand them wanting to corner the market and make sure that coffee drinkers can get their fix but at what cost? I also agree that it's more than just coffee - it's a particular lifestyle they're selling, and if you don't buy into it, you're just not welcome.
PermalinkPermalink 11/05/07 @ 06:37
Comment from: TimmyMac [Visitor] Email · http://www.themcintireconspiracy.com
I swear I'm not trying to be the Designated Contrarian around here! I swear! I'm as opposed to the creep of monoculture as anyone.

BUT...I was making a similar complaint about Starbucks to a friend, and he pointed out that the company has incredible benefits, including health, stock purchase, and adoption assistance, and domestic partners are included, too. Most independent coffee shops can't/don't treat their workers that well.

So while I'd prefer more locally-owned businesses, I guess I'm not as inclined to see Starbucks as the evil corporation I once did.

PermalinkPermalink 11/05/07 @ 08:16
Comment from: Andrew [Visitor] Email
Your frustration is understandable, but imagine the situation with the coffee shops reversed. Pretend Starbucks was passed over by the management company in favor of the local coffee shop. Would that still be upsetting, or would it be consumer justice, since Starbucks is big and the local place is small? Both shops have managers, employees, and lives that are affected by a business closure.

It seems the blame should rest entirely with the property management company. They decided they'd rather have a Starbucks than a local business. They have full control over what businesses have what locations.

Rather than collusion, it seems much more likely that Starbucks had talked to property management months in advance, simply saying "We'd like a location in this mall; let us know when a space is available."
PermalinkPermalink 11/05/07 @ 09:04
Comment from: Jay [Visitor] Email
Before adding my thoughts here, I feel oddly compelled to share that, like TimmyMac above, I am not an apologist for "monoculture" or mult-nationals. With regards to Starbucks in particular, my wife and I often decry the ubiquitous and pervasive nature of the monolith that is Starbucks... Seriously, who writes like that?

But, I can recall standing on a street corner,either in NYC or San Francisco (right now, I don't recall which) and saying to my wife something like, "Am I really able to see three Starbucks right now? Umm, has anybody ever heard of market saturation?" For her part, my wife swears, only half-jokingly, that Starbucks must put something addictive in every consumable product they sell...

Having said that, I have a friend who likes to say, in all situations like this, "Follow the money." It really is all about business.

There's nothing wrong or unfair about the plaza management company making what, for them, is a great deal: They exchange a moderately successful tenant for one able to pay a premium and bring traffic into their plaza. That's why they're in business: to maximize profits. From their point of view, it's likely the other businesses in the plaza will derive some benefit from the increased traffic, creating opportunities to raise lease rates in the future.

There's nothing preventing large companies from doing this sort of thing because the playing field really is level. By that, I mean that there is no "handicap" placed on large businesses to negate the competetive advantage they've gained by having a successful business. Should there be? To me, the concept of a "level playing field" doesn't equate to equal outcomes, merely equal opportunities. Did Infinity Espresso have the opportunity to go to the plaza managers before their lease expired and negotiate a new deal? Of course. That they weren't able to predict that Starbucks would be looking to move in is unfortunate for them, certainly, but it's simply how business is done.

Finally, to the issue of adding value for the consumer. You and I may not see the benefit to having yet another Starbucks, but plainly consumers in general do. Starbucks rarely makes a mistake in its selection of location, the failed Starbucks in the Forbidden City notwithstanding. Will people go to that new location? You bet they will. Like they're addicts who can't wait to get what they need.

Hmmm. Maybe my wife is on to something...
PermalinkPermalink 11/05/07 @ 10:03
Comment from: Dr. Biggles [Visitor] Email · http://www.meathenge.com
I blame "us". If "we" didn't patronize these mind numbingly stupid places they wouldn't exist. Walmart, aol, starbucks, dell, boring. I patronize non.

Biggles
PermalinkPermalink 11/05/07 @ 10:28
Comment from: Maureen [Visitor] Email
In the morning I like a cafe au lait and can go almost any place in the world and be understood with that request. Starbucks employees have no clue what that means as it is called something unmemorable. I enjoy small, original, local coffee houses and that is where I take my business. The coffee is usually better and the chairs more comfortable.
PermalinkPermalink 11/05/07 @ 12:37
Comment from: brittany [Visitor] Email · http://thepielady-brittany.blogspot.com/
fellow seattleite here- and I HATE the evil empire that is starbucks. Yes they are a prime example of free market, and it's just something we all have to deal with. What I can't stand is the crappy product they are selling. It's the McDonalds of coffee. Right down to the push button espresso machines and locations on every sreet corner. And don't get me started on the AWFUL corporate pastries they are feeding to people.
PermalinkPermalink 11/05/07 @ 13:10
Comment from: New Mexi-cow [Visitor] Email
I believe in free market... as a small indie restaurant, I'd love to grow it to a huge franchise.... but it ain't ever gonna happen. My quality would suffer.

On a to Seattle, I was damned if I was gonna give my money for my morning wake-up juice to Starbucks... I voted with my feet and walked across the street...
to "Seattle's Best Coffee." Hurray for the hometown little guys. Joke's on me, later I found out they were bought out long ago by Starbucks!

AS for me, if I can't compete with the big guys, and it's getting harder every year, then maybe I need to go do something else. But I still have to spend a lot more than I used to in marketing.

PermalinkPermalink 11/05/07 @ 13:20
Comment from: pacific_waters [Visitor] Email
I am not a fan of starbucks, crap coffe and bad pastries, but you're way off base here. If you want to blame anyone blame the fools who spend whatever they spend a t sbucks for crap coffe and bad pastry,i.e., blame complacent consumers with poorly educated palates.
PermalinkPermalink 11/05/07 @ 13:38
Comment from: Sarah the Policy Wonk [Visitor] Email
I, too, was surprised to read this on this blog, given that Kate has espoused free-market ideals here.

And here's the thing: this was a perfect expression of what happens in the free market. The plaza management company had a good (their rental space), and they chose to sell (rent) it to the highest bidder. They also chose not to let the current renter bid. Under the principles of the free market, that is their right.

And this is the problem I have with free market ideology. On the surface it sounds great - of course, we should all be totally free to choose how we spend our money and sell our goods or labor. But in the current economy, as dominated as it is by multinationals, the free market can have the effect of allowing these multinationals to become effective monopolies. Not very free-market at all.
PermalinkPermalink 11/05/07 @ 13:41
Comment from: anon [Visitor]
So, Kate, your idea would be for the plaza management to keep the little guy and get less rent than they could get from Charbucks? What kind of cool-aid are you drinking? The company that has the money gets the space, and the one that doesn't is the loser. Same as it ever was...
PermalinkPermalink 11/06/07 @ 14:46
Comment from: former Starbucks drone [Visitor]
I just wanted to chime in with TimmyMac. Starbucks is a pretty great company if you're one of their employees. Not only do they have impressive benefits, but they open them up to employees who only work 20 hours a week. I don't have the luxury of being able to go without health coverage for even a little while, so if the company that I'm working for now, full time, doesn't pony up before my student coverage runs out, I'm going back to the 'Bux.

I certainly wish that they'd stand back a bit and let independent shops hang on to their market share and leases, and I prefer to patronize independent shops myself. But I have a price, and it's affordable prescriptions.
PermalinkPermalink 11/07/07 @ 05:07
Comment from: M1 [Visitor]
yes they would not know a Good cup of coffee if it landed in thier lap. I like Cains coffee and it is cheap, wierd. No wonder why they are closing 100 units and now saling thier brand cheaper. Thier Smug Hacks.
PermalinkPermalink 03/05/08 @ 14:04
Comment from: Stacie [Visitor] Email · http://livetoeat-blog.blogspot.com/
What does Sbux have that other smaller indie shops don't have? Consistency. When I moved from Portland, OR (the second best place for coffee next to Seattle) to VA 10 years ago, it was damn hard to find a good cup of coffee. For those of you outside the NW, you probably have no idea how this can be so. But I can't tell you how many local shops I patronized and left disappointed. When the (formerly) evil Starbucks finally made it's way to the east coast I was jumping for joy because at least I KNEW what I was getting for my $4. Having subsequently worked there for 2 years, I can also say that they do treat their employees pretty well and for the most part, employees are well trained - which is more than I can say for the local shops around here that I desparately want to go to but they just don't know how to make a cappucino!!
Yes, Sbux got a little too big for it's britches and it's time for a reality check. But I give them credit for running a pretty successful business.
PermalinkPermalink 07/18/08 @ 09:23
Comment from: JIm [Visitor] Email · http://www.shortcuts.nl
Sorry - I only blame the plaza management. You'd *like* to think there's collusion because it reinforces the modern "Starbucks is evil" position, but I bet the management were the prime movers of this. You do know that mall managment's job is to also SOLICIT stores to move to their properties, right?

While a coffee shop will bring people in from the locale, a Starbucks will pull even more -- I bet management thought it was payday. They'll finally get the traffic they want at the mall..

Not surprisingly, the Starbucks is to close; there probably wasn't the traffic required to keep it open, so SB's own management was able to cancel the contract. I wonder what the mall offered...
PermalinkPermalink 07/19/08 @ 00:52

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