I'll stop in for a latte now and then, hanging out with a copy of the New York Times, or doing some grading while I'm there. I appreciate the bookish ambiance, which was not a streetcorner phenomenon back in the '80s. I try not to pay attention to the left-wing, socially conscious politics of the place, although it's undeniable.
Thus, I'm getting a kick from Right Wing Professor's great post on Starbucks, a company that's maxed-out its market saturation, and has suffered a sharp drop-off in business of late:
I don’t know if you’ve been following this, but here’s a quick run down.
Starbucks is started to cater to the chi-chi latte liberal crowd. Starbucks adds wi-fi.
Starbucks almost immediately has problems. The group they cater to also hates capitalists. Starbucks does everything they can to be ultra-green, socially conscious, and offers everything they can to make the latte liberals feel good about themselves if they buy Starbucks coffee.
Starbucks adds catered bakery items and sandwiches, and begins to compete with Dunkin’ Donuts, McDonald’s, Burger King, you name it — but only barely (keep reading).
In the meantime, every business on the block starts putting in wi-fi, removing that niche for Starbucks.
Starbucks adds drive-through windows, and revenues skyrocket (and are you surprised, given that with a drive-through, you don’t have to put up with all of the dolphins and rainbows and “fair-trade” nonsense?) Starbucks builds more and more stores, over-saturating the market.
With me so far? Geese and ganders and all that, so since Starbucks had decided to play with the big boys, they decided to play back, starting with Dunkin’ Donuts, when they started offering espresso-derived coffee drinks. Dunkin’ Donuts was boosted by several loudly touted consumer surveys, which found that people preferred Dunkin’ Donuts’ coffees to those at Starbucks. Dunkin’ Donuts then begins a very savvy ad campaign, which mocks Starbucks chi-chi-ness.
Starbucks, with an over-saturated market (there are blocks in Midtown that have three Starbucks), and (shudder!) competition from Dunkin’ Donuts begins to lose market share (read: customers). And revenue.
Then the really big boy on the block decided to start playing: McDonald’s.
This fall, a McDonald’s here added a position to its crew: barista.
McDonald’s is setting out to poach Starbucks customers with the biggest addition to its menu in 30 years. Starting this year, the company’s nearly 14,000 U.S. locations will install coffee bars with “baristas” serving cappuccinos, lattes, mochas and the Frappe, similar to Starbucks’ ice-blended Frappuccino...
And McDonald’s sales revenues for their espresso-line in test markets are through the roof. Of course, like Dunkin’ Donuts, you don’t get the squishy, gooey, organic, free-range, warm fuzzies you do from Starbucks, and they’re not catering to the real fussy idiots who have to have exactly this particular kind of fake milk and that particular esoteric flavoring flown in from Italy, but run the numbers (which I don’t have in front of me). Just in terms of customers, how many thousands more people go to McDonald’s as opposed to Starbucks?
Read the whole thing.
It looks like Starbucks needs a "fresh jolt."
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