
Why Starbucks actually helps mom and pop coffeehouses (2007) - Tomte
http://www.slate.com/articles/news_and_politics/hey_wait_a_minute/2007/12/dont_fear_starbucks.single.html
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alanh
Awesome. Money quote:

> _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—and, 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._

The article was written in 2007. The closing sentences seem a bit prophetic:

> _" You can't do better than a cup of coffee for profit. It's insanity. A cup
> of coffee costs 16 cents. Once you add in labor and overhead, you're still
> charging a 400 percent markup—not bad! Where else can you do that?" Until
> Americans decide they need to pay four bucks a pop every morning for a
> custom-baked, designer-toast experience, probably nowhere._

Lo and behold, $4 toast is a thing:

[http://www.psmag.com/health-and-behavior/toast-story-
latest-...](http://www.psmag.com/health-and-behavior/toast-story-latest-
artisanal-food-craze-72676)

~~~
patio11
$4 toast isn't _nearly_ as good a business as $4 coffee unless they succeed in
making the toast literally, medically habit-forming. That's Starbucks' entire
business model: ensure that a caffeinated beverage is part of your morning
ritual (afternoon is a nice bonus, but they make a stupendous portion of
revenue before 9 AM), get you to do it with the same regularity as brushing
your teeth, and ensure that there is a pleasant green priestess very
physically convenient when you feel the need to make your obeisance to the
caffeine gods.

(Says a habitual coffee drinker who came to the habit late in life, and who is
very happy he's moderately dependent on a substance which is highly unlikely
to kill him, as opposed to being more-than-moderately dependent on any of the
number of substances which would stand substantial risk of killing him.)

~~~
kanamekun
<< Says a habitual coffee drinker who came to the habit late in life, and who
is very happy he's moderately dependent on a substance which is highly
unlikely to kill him >>

Coffee will do more than not kill you; it was recently found to confer a
"reduced risk of dying from heart disease and certain other causes"!

<< Compared with abstainers, nonsmokers who drank a cup of coffee a day had a
6 percent reduced risk of death, one to three cups an 8 percent reduced risk,
three to five cups a 15 percent reduced risk, and more than five cups a 12
percent reduced risk. There was little difference whether they drank
caffeinated or decaffeinated coffee. The association persisted after
controlling for age, alcohol consumption, B.M.I. and other health and diet
factors. >>

[http://well.blogs.nytimes.com/2015/11/18/coffee-tied-to-
lowe...](http://well.blogs.nytimes.com/2015/11/18/coffee-tied-to-lower-risk-
of-dying/)

------
danso
Most of my coffee shop experience has been in lower Manhattan, well after the
publication date of the OP...but anecdotally, the premise seems sound to my
biased mind. I never had any hesitation plunking $3-$4 for a iced coffee at
Blue Bottle/Bluebird/MUD/Abraco (the best place in the East Village IMHO)
because I would think to myself, "Well, it's about $2.50 in Starbucks, which
is the Walmart of coffee"

~~~
frutiger
In the EV, make sure you throw in 'Ninth Street Esrpesso' (multiple locations:
9th and C, 10th and B, and a couple in midtown), 'Boxkite' to your rotation
(St. Marks btw. A & 1st), as well as 'Van Leeuwen' (7th btw. 1st & 2nd). On
the west side, there's also 'Ground Support' (W. Broadway btw. Spring &
Broome), and in Tribeca there's 'Kaffe 1668' (Greenwich St. btw. Murray &
Warren).

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enraged_camel
I think another way Starbucks helps local coffee shops is by creating an
"identity outlet" for the anti-yuppie, anti-corporate crowd. I have friends
who never go to Starbucks, and make sure to point that out at every
opportunity. So the way they act out that part of their identity is by going
to a local coffee shop instead.

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alexisnorman
I wonder how this works in places that are much more spread out than NYC or
San Francisco. I live in Phoenix and there are drive-thru Starbucks at what
seems like every intersection but it seems like mom and pop shops are pushed
out of this equation here. One popular local shop closed down this year after
a drive-thru Starbucks opened up in the same plaza. People here are definitely
more in line with corporate (/more convenient?) businesses than the little
guys, so maybe that has something to do with it.

~~~
specialist
I recently found maybe 6 "third place" style cafes (for laptop camping) in the
entire Phoenix valley that weren't chains. Years ago, IIRC, I found none open
after 5pm.

To have "local culture" you need to get people out of their cars, houses,
offices. Tellingly, the best cafe I found was next to a church and affiliated
somehow.

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gpmcadam

        > you'll never see discounts or punch cards at Starbucks
    

That's funny, I just filled my Starbucks punch card today and got a free Xmas
coffee (UK).

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islandtech
I think coffee is vastly overpriced compared to Europe. I always drink gallons
of the stuff whilst in Europe for several reasons, not the least of which is
that it's better over there. The experience is nicer. I have a favourite small
European country where I can literally buy two espressos or two cappuccinos
for the price of one here. I grew up in Europe and have always preferred the
European idea of cafes to the North American variety. I can also usually get a
decent meal in a European cafe, albeit a one or two course meal. One can still
smoke outside at the tables in quite a bit of Europe. North Americans have
their knickers in a twist over smokers.

~~~
spike021
I'm not sure what the issue is with North Americans having "their knickers in
a twist."

It's a proven health issue, even if the smoke is inhaled second-hand. I'd say
it's more of a responsibility for smokers in general: if you want to smoke, I
won't judge, but please respect me in turn and understand that you may be near
people who would like not to be getting the smoke second-hand.

Again, not sure what the issue is.

~~~
sehr
Coffee & cigarettes go hand in hand in some places, just a cultural difference
they might miss here in NA

~~~
johnmaguire2013
They're both stimulants, of course they go hand in hand! ;)

------
misterbwong
A rising tide lifts all boats

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guyzero
Until 2012 there was an intersection in Vancouver with Starbucks on 2 of the 4
corners and a different coffee shop on the third corner. So even Starbucks
knows this.

[http://www.cbc.ca/news/canada/british-columbia/kitty-
corner-...](http://www.cbc.ca/news/canada/british-columbia/kitty-corner-
vancouver-starbucks-closes-1.1163030)

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ansgri
In Moscow (Russia) there are two major coffee shop chains: Coffee House and
Shokoladnitsa, Starbucks being a rare and expensive beast. And you know what,
these two are always next to each other, like 20m nearby or on opposite sides
of a street. I suppose they understand this 'overflow' phenomenon perfectly.

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skizm
This is funny. There are several coffee shops in my town that you can see
while sitting in Starbucks. I was super confused till I went out and tried
them all. I still go to Starbucks since they are cheaper and better tasting
then the rest but I can see the logic.

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rer0tsaz
They helped a local 30-year-old coffeehouse by buying them and their neighbor
at above market rate. Backed by illegal secret tax deals, as it turned out.

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irremediable
Huh. I wonder. I can believe that Starbucks actually help nearby shops, but I
bet it depends on the neighbourhood.

