Starbucks

StonyIron

They opened 36 stores in the Dublin area yet there are still thriving independents.

Cork isn't small town America when it comes to food culture - it has a pretty serious artisan food and quirky cafe/restaurant culture.

Where Starbucks and Costa (even more dramatically) fall down is on food. They're not even in the same league as Cafe Gusto or many other Cork local places.

The issue with space is also somewhat unfair. Irish councils charge rates based on floor area. So coffee shops are paying very high prices for space. Starbucks has deeper pockets so, it can open bigger stores and sink a loss and write off taxes charging itself to use its own name and coffee via complex subsidiary arrangements.

The small independents can't do that very easily so can't expand.

I think rates need to be charged on local, individual store profits, not floor space which is a totally daft way of calculating anything!

Also, the cost of space in the city centre in terms of rent is huge and favours big, multinational chains with backup that gives them easy access to credit.

Local businesses don't have anything remotely like that level of money.

It's not a level playing field and I think if you want your local coffee places you're just going to have to ensure you actually use them.

There'll be no point in Cork people lamenting long lost local brands if they voted with their wallets.

It's the same with Cork airport. I've seen people moan about lack of routes and then get the Aircoach to Dublin to save €30.00 that they would spend on a few drinks without noticing it at their destination.

We've got to, at least to some degree, be willing to support local.

KCAccidental

TheChizler wrote: »

You can't know for sure that's their intention without hearing from an inside source though?

they do, it's called 'clustering'

"Clustering: The Starbucks Model" , p. 135-40.
-from No Logo: Taking Aim at the Brand Bullies, No Space, No Choice, No Jobs, No Logo by Naomi Klein (1999)


"A Comforting Third Place" is the phrase Starbucks uses to promote itself in its newsletters and evangelical annual reports. This is not just another non-space like Wal-Mart or McDonalds, it's an intimate nook where sophisticated people can share "coffee... community... camaraderie... connection."

Everything about New Age chains like Starbucks is designed to assure us that they are a different breed from the strip-mall franchises of yesterday. This isn't dreck for the masses, it's intelligent furniture, it's cosmetics as political activism, it's the bookstore as an "old-world library",' it's the coffee shop that wants to stare deep into your eyes and "connect."

But there's a catch. The need for more intimate spaces designed to tempt people to linger may indeed provide a powerful counterpoint to the cavernous big boxes, but these two retail trends are not as far apart as they appear at first. For instance, the mechanics of Starbucks' dizzying expansion during the past thirteen years has more in common with Wal-Mart's plan for global domination than the brand managers at the folksy coffee chain like to admit. Rather than dropping an enormous big box on the edge of town, Starbucks' policy is to drop "clusters" of outlets in urban areas already dotted with cafes and espresso bars. This strategy relies just as heavily on an economy of scale as Wal-Mart's does and the effect on competition is much the same. Since Starbucks is explicit about its desire to enter markets only where it can "become the leading retailer and brand of coffee," the company has concentrated its store-a-day growth in relatively few areas. Instead of opening a few stores in every city in the world, or even in North America, Starbucks waits until it can blitz an entire area and spread, to quote Globe and Mail columnist John Barber, "like head lice through a kindergarten." It's a highly aggressive strategy, and it involves something the company calls "cannibalization."

The idea is to saturate an area with stores until the coffee competition is so fierce that sales drop even in individual Starbucks outlets.

from bloomberg

Indeed, the crowding of so many stores so close together has become a national joke, eliciting quips such as this headline in The Onion, a satirical publication: "A New Starbucks Opens in Rest-room of Existing Starbucks." And even the company admits that while its practice of blanketing an area with stores helps achieve market dominance, it can cut sales at existing outlets. "We probably self-cannibalize our stores at a rate of 30% a year," Schultz (former CEO) says.

http://www.bloomberg.com/bw/stories/2002-09-08/planet-starbucks

TheChizler

KCAccidental wrote: »

they do, it's called 'clustering'



from bloomberg



http://www.bloomberg.com/bw/stories/2002-09-08/planet-starbucks

That's just the opinion of the journalist though. Their actions may be interpreted that way but I'd be hesitant to say for definite that that's their policy.

KCAccidental

TheChizler wrote: »

That's just the opinion of the journalist though. Their actions may be interpreted that way but I'd be hesitant to say for definite that that's their policy.

The Bloomberg article features quotes from Howard Schulz founder and former CEO about the positives and drawbacks of the clustering policy to be fair.

StonyIron

KCAccidental wrote: »

they do, it's called 'clustering'



from bloomberg



http://www.bloomberg.com/bw/stories/2002-09-08/planet-starbucks

Starbucks did themselves a lot of financial damage in North America by opening *way* too many stores.

It was more about completely insane over expansion than any strategy.

JohnK

They're open in Douglas now

JohnMearsheimer

JohnK wrote: »

They're open in Douglas now

I walked past it this evening. It looked like a pleasant place to spend an hour.

JohnK

Yeah it was quite comfortable in there alright. Think I heard them say they close at 8pm but later on a Friday, and I think earlier on a Sunday.

run_Forrest_run

JohnMearsheimer wrote: »

I walked past it this evening. It looked like a pleasant place to spend an hour.

how big is it? One of the major problems I find with cafes in Douglas is the size of them and the inability to find a seat (mainly because there are two biddies nattering over two empty cups sitting sitting at a table for 4) :mad:

JohnMearsheimer

run_Forrest_run wrote: »

how big is it? One of the major problems I find with cafes in Douglas is the size of them and the inability to find a seat (mainly because there are two biddies nattering over two empty cups sitting sitting at a table for 4) :mad:

The unit seemed quite spacious. It's stretches all the way down to Leonard's Hair Salon. Having said that I don't think they overly rammed the place tables and chairs. People didn't seem to be on too of each other.

TheChizler

JohnMearsheimer wrote: »

The unit seemed quite spacious. It's stretches all the way down to Leonard's Hair Salon. Having said that I don't think they overly rammed the place tables and chairs. People didn't seem to be on too of each other.

Here it is!



Terrible picture but I was trying to be discrete instead of looking like a crazy person taking a picture of a Starbucks.

Douglas Eegit

TheChizler wrote: »

Here it is!

Terrible picture but I was trying to be discrete instead of looking like a crazy person taking a picture of a Starbucks.

Looks tidy. I bet it really brightens up the area!

UpCork

I went there yesterday afternoon. Definitely much bigger than the one in Patrick St. You could sit there and have a chat. Barely able to get a seat in Patrick St and felt as if they wanted you to just get a drink and go.

moyners

TheChizler wrote: »

Here it is!

Terrible picture but I was trying to be discrete instead of looking like a crazy person taking a picture of a Starbucks.

Think I was there around the same time as you I thought it was quite nice inside as Starbucks go, it definitely takes away a bit of the "post-tiger crash" feel of that entrance!

TheChizler

Did you see a mad fellow holding his phone up pretending to be trying to get signal and his girlfriend looking mortified?