I make no
secret of the fact that I don't much like Starbucks. The reason
isn't because of its poor record on fair trade (which I believe
it has somewhat 'fixed' now), or even its not-the-best coffee.
The reason why I have grown to dislike Starbucks is because of
their aggressive global expansion and McDonaldisation of the 'coffee
I don't much like any of the big brand shops, McDonalds,
Burger King, etc. However the truth is that they drive supplier's
price down and, in general, are able to attract
consumers because they are simply cheaper than small independent
stores. Then of course there is the value of 'brand recognition.'
Step into any McDonalds or Starbucks and if you've been to one,
you'll be familiar with what's on offer at another. That kind of
familiarity is good for repeat customers who aren't looking so
much for the 'experience' as they are looking for a burger
Of course, Starbucks has a responsibility to its shareholders
to be successful. Their strategy is unashamedly to continue an
aggressive program of rapid expansion, growing by more than four
stores and 200 employees every day. But as the company sells itself
on the experience of Starbucks, I find myself turned off by its
feeling of mass production and by the fact that a Starbucks could
appear at the end of my street almost overnight, and just like
a MacDonalds, its success would be almost guaranteed.
My fear is that Starbucks will simply drive my favorite
independent coffee houses out of business, the likes of Portland
Coffee House in Portland, Oregon, The Revue in Fresno, California,
Uptown Espresso in Seattle, and my favorite, The Atomic Café in
Beverly, Massachusetts. Unsurprisingly, despite the disappearance
of many independents, Starbucks themselves feel that their expansion
doesn't have a negative effect on the competition but rather "invigorates
the marketplace," which is corporate language for "such-is-life."
Another objection I have to Starbucks is the price. Here in the
UK my local Borders bookstore (yes I know, another big retail group)
used to have its own little coffee shop. However, Borders did a
deal and replaced all of their in-house coffee outlets
with Starbucks. My usual drink of choice, an almond steamer, leapt
in price from just 40p to nearly £2.70 (about
$4.50)! It's steamed milk with a couple of shots of syrup,
for goodness sake!
Jon Markman of MSN Money recently broke down the cost of his regular
Starbucks beverage, a double-tall, extra-hot latte with a single
pump of sugar-free vanilla costing $3.22. He concluded that the
main ingredient was a double shot of espresso, costing $1.85. The
Starbucks he visits doesn't charge him for the shot of vanilla,
and at the sugar-and-napkins counter he could pour as much milk
into his cup as he likes, so that's free, too. Therefore the $1.37
premium was simply for the labor of steaming the milk, which takes
about 20 seconds. Markman writes, "If a barista can do three
steamed milks in a minute and keep up that pace all day, then she's
earning Starbucks around $246 an hour just by steaming milk."
As much as I want to hate Starbucks for being a big-nasty-megacorp,
I couldn't help but soften up a little when I learned of one daily
routine carried out by Starbucks CEO-designate Jim Donald. Apparently,
according to a recent magazine article in Workforce Management,
Donald calls five of the 550 Starbucks district managers in North
America, each of whom oversees 10 stores, to check in for a minute
or two. He then dials three Starbucks stores at random to say thank
you to employees and ask for feedback. Indeed, looking after its
staff, or 'partners' as they like to refer to them, is one of
the cornerstones of the company's strategy. In fact, chairman and
chief global strategist Howard Schultz told BusinessWeek Online
in October that in the next two years, Starbucks will spend more
on employee health care costs than it does on coffee!
Perhaps I'm just old fashioned and overly romantic about the business
of doing business. It's getting harder and harder to support the
'little guy' these days because they're getting fewer in numbers,
pushed into obscurity by the mass produced machines of the big-brands.
For me the 'experience' of shopping has eroded to a mere function.
We travel like drones to the mall, to walk through the very same
selection of shops that we would find in any mall, anywhere. It
would seem that Individualism is something of a lost cause, and
maybe it's just me, but I think we're poorer for it.