Starbucks plans on 40,000 stores in total!

[phaelon56]

Ouch. Talk about world domination. The 'bucks is currently expecting to have 14,000 stores worldwide by the end of 2006 and has now upped their estimate for long range plans to a level 10,000 stores more than they had previously projected.

Starbucks Expansion Plans

The bizarre aspect of this - to my thinking - is that half of the new stores will be in the US. That makes for 18,000 additional Starbucks in the US. I guess the old standup comic's joke (was it Carlin who said it?) about opening a Starbucks inside a Starbucks was not too far off.

It's both bad news and good news for independents. Bad news because Starbucks will cut buying contracts for more beans than ever - thereby reducing the supply of some of the better-than-commodity level beans currently used by most independents (and driving up prices in the process although if the coffee farmers and their families see the bulk of the extra money it then becomes a good thing).

But the good news is that they can't possibly improve quality and it may decline even more than it has in recent years - when you operate on that massive a scale it's inevitable that quality has to suffer a bit. That opens even more doors for quality driven independent operators to distinguish themselves and gain more customers and more loyalty.

And here's the cartoon that makes more sense than ever after this news update.

Starbucks Relativity

[johnsmith45678]

It's amazing there are still places they don't exist! There are 80 Starbucks within a 10-mile radius of where I live. The other day I was downtown and I saw two Starbucks within two blocks of each other. I never go to Starbucks.

[PaniniGuy]

The bizarre aspect of this - to my thinking - is that half of the new stores will be in the US.  That makes for 18,000 additional Starbucks in the US.  I guess the old standup comic's joke (was it Carlin who said it?) about opening a Starbucks inside a Starbucks was not too far off.

It's both bad news and good news for independents. Bad news because Starbucks will cut buying contracts for more beans than ever - thereby reducing the supply of some of the better-than-commodity level beans currently used by most independents (and driving up prices in the process although if the coffee farmers and their families see the bulk of the extra money it then becomes a good thing).

But the good news is that they can't possibly improve quality and it may decline even more than it has in recent years - when you operate on that massive a scale it's inevitable that quality has to suffer a bit. 

Way I read the Seattle PI article yesterday was that 20,000 total stores in US is the goal. Whether that's SBUX-owned or having branded kiosks everywhere (like B&N) wasn't clear.

They must be encouraged by the fact that deployment of their new superautos hasn't hurt business. Now they can safely remove the "mystique" of the barista and simply train people to be good button-pushing PBTCs - they'll be selling third place and service, not coffee.

On the beans, you'd know better than I since you're buying volume green, but I'd doubt they're planning to go after better auction lot coffees, thus the super-quality roasters won't be adverely affected (e.g. Intelligentsia's Direct Trade relationships) and probably not buyers who spend a lot of time at origin (e.g. Sweet Maria's).

I would think SBUX's added capacity would put more pressure on roasters who are selling above average, but not superpremium, Arabica to supermarkets - that's seems more likely the competition for SBUX in the open market.

Or, maybe they're just planning on buying Rwanda?

[JohnL]

Starbucks is less in the coffee business and more in the coffee based beverage biz.

as Mimi Sheraton put it in another thread here--"They are in the milk business."

That said--I believe they are raising the level of awareness of coffee served in its various forms and in many cases raised the level of overall quality. (most coffee shops around the New York Area were selling swill).

As for a basic cup of Joe--Duncan Donuts has offered up a decent cup for years.

(wisely for them they are trying to stay with Starbucks in the coffee area as starbucks has offered pastries etc).

I still believe that Starbucks roasts their coffees too darkly (losing distinguishing characteristics--oddly many gourmet markets in NYC have long sold coffee beans that are too lightly roasted).

Regardless, the success of Starbucks is a good thing and will lead to healthy competition. I do believe they have got to be nearing a saturation point though.

[jgm]

If all this expansion doesn't lead to a Starbucks within a reasonable distance from my office, I'm gonna throw a fairly large hissyfit.

If good coffee was available locally, I'd be anti-Starbucks along with a lot of other people, but where I live, it happens to be just about the best available. There are some coffee shops in town that probably offer a pretty good cuppa, but buying coffee from them includes finding a parking space and walking to the shop, and I never have my act together in the morning, early enough to allow for that.

Hello, Starbucks? Downtown Wichita, Kansas, ASAP. Drive-through window is not optional. Fresh madeleines also, please.

Civilization is so hard to come by, sometimes.

[SushiCat]

If all this expansion doesn't lead to a Starbucks within a reasonable distance from my office, I'm gonna throw a fairly large hissyfit.

If good coffee was available locally, I'd be anti-Starbucks along with a lot of other people, but where I live, it happens to be just about the best available.  There are some coffee shops in town that probably offer a pretty good cuppa, but buying coffee from them includes finding a parking space and walking to the shop, and I never have my act together in the morning, early enough to allow for that. 

Hello, Starbucks?  Downtown Wichita, Kansas, ASAP.  Drive-through window is not optional.  Fresh madeleines also, please.

Civilization is so hard to come by, sometimes.

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Exactly why there is still so much room for those additional SBUX locations. As much as I try not to go there, I agree they have done a service and continue to do so. I also agree that they are mostly in the milk and sugar business - it is a great study in marketing / branding!

[TRK]

It is funny, I am as anti-Starbucks as the next guy, but I was reading The United States of Arugula recently and discovered that the two guys who started Starbucks were involved in the Free Speech movement at Berkeley. In fact went to jail with Alice Waters' boyfriend and co-creator of Chez Panisse. It is ironic that two guys who were once so anti-establishment started a business that epitomizes capitalist dominance and conformity to so many now.