"... American coffee chains (particularly Starbucks but also some of the donut variety) have tried to break in and mostly failed. Starbucks closed most of its stores last year after multi-million dollar losses. They couldn’t cope with the Australian competition... I would love to be corrected – but I think the reason has to do with our wage structure. American low-end wages are very low indeed whereas Australia has minimum wages at quite high levels. ..."
Could a simpler reason be that these chains make crap coffee
Failure has less to do with cost than understanding what the customer wants. Importing a supermarket/chain concept and then expecting the locals - I'm from Melbourne ~ http://www.flickr.com/photos/bootload/sets/72157600195992630... - exposed to multitudes of small well run cafe's with a heritage of coffee since the 1950's means the local population are quite sophisticated in their understanding and taste. Generic coffee chains with their cookie cutter approach can't easily match this. Not even by price.
This doesn't really explain why these chains succeed in America, though.
My current theory about this has to do with the relative mobility of the populations. Speaking personally, when I'm at home I never go to Starbucks. There's a dozen other coffeeshops within walking distance and most make better coffee, and I know which are which. When I'm traveling to another city, though, I'm fairly likely to go to Starbucks simply because I know what I'll get there (a slightly overpriced, slightly over-bitter, but adequate, latte), while experience has shown that picking an unknown local coffeeshop leads to, on average, a worse cup of coffee, with high variation.
"... This doesn't really explain why these chains succeed in America, though. ..."
How about "acceptance of a lower standard of coffee?", different culture (Melbourne historically more influenced by Europe than America) and the relative youth of "business franchises" in Australia?
"... I'm fairly likely to go to Starbucks simply because I know what I'll get there (a slightly overpriced, slightly over-bitter, but adequate, latte), while experience has shown that picking an unknown local coffeeshop leads to, on average, a worse cup of coffee, with high variation. ..."
That's a good explanation - take the safe, reliable option even if it's not quite the real thing.
I'd offer another, theory. Starbucks also happens to choose their locations near known coffee locations to offer customers an alternative customers with the hope of putting them out of business. This is what happened in Melbourne and it backfired. The competition was too great ~ http://www.melbournecoffeereview.com/2008/07/celebrate-good-...
The problem of "finding a good coffee" might be solvable in the US by Starbucks. But in a city where Italian migrants created the "Cafe` lifestyle" through respect of produce, technology and setting, Starbucks efforts are a poor imitation.
In London Starbucks is usually the best choice unless you know which local places are good. A lot (in fact I would say the majority) of the mom-and-pop places in the center are just as expensive and serve much worse coffee.
From a recent review of an independent that is next to a Starbucks:
"Best to throw the coffee in the Thames, and remember to offer a brief prayer for the fish."
Could a simpler reason be that these chains make crap coffee
Failure has less to do with cost than understanding what the customer wants. Importing a supermarket/chain concept and then expecting the locals - I'm from Melbourne ~ http://www.flickr.com/photos/bootload/sets/72157600195992630... - exposed to multitudes of small well run cafe's with a heritage of coffee since the 1950's means the local population are quite sophisticated in their understanding and taste. Generic coffee chains with their cookie cutter approach can't easily match this. Not even by price.