Starbucks

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storewanderer
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Starbucks

Post by storewanderer » June 23rd, 2020, 10:59 pm

Today Starbucks announced they will be closing 400 US locations over the next 18 months.

I am noticing heavy promotion for Safeway Starbucks (25% off, $1 off, etc.) the past couple months on the app, as well as in-store PA announcements. I am also noticing 20% off Target Circle offer for in-Target Starbucks now. It seemed like Starbucks was already running quite a few promotions through its app before Coronavirus started (lots of buy one get one free offers at least I was getting).

I am under the impression Starbucks is in major trouble given the Coronavirus situation with fewer people "out" meaning fewer impulse purchases of drinks at Starbucks. However if they are struggling inside Safeway and Target (which have been very crowded in recent months) too when those places have been so busy, then it appears there may be bigger problems here.

Yet here in Reno a new chain Dutch Bros. has opened a few double drive through locations around town and I am noticing this place is busy at pretty much all hours. They stay open late (I think one used to be 24 hours but stopped), way later than Starbucks, and have a line going at 10 PM. I've watched their line and it seems to move very efficiently, like, they average less than a minute at the window per car. I have noticed also their pricing is lower than Starbucks. Many people I know prefer Dutch Bros. to Starbucks. I don't like drive throughs, so I don't fully trust the Dutch Bros. concept where I can't see the preparation area, so cannot comment on the product.

I am kind of disappointed to see this. Starbucks has always been a well run operation. I know their pricing is very high and they pay their employees well above what most other fast foods pay and have a much better benefit package.

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Re: Starbucks

Post by buckguy » June 24th, 2020, 5:04 am

I doubt that they are "in trouble". They already were planning to close 400 locations, which is a drop in the bucket for them. If the DC stores are any indication, they are redundant locations that probably are coming up for lease renewal and landlords have been driving out businesses with steep increases in these areas. Starbucks also plan to convert several hundred locations to takeout only---they've run takeout only stores in the past, but on a smaller scale. These are perfect for urban locations which run on a breakfast/lunch trade. The kiosks in stores other than Target never seem busy to me---I've always wondered what the model was for those.

Coffee shops in general seem to be hitting their peak (finally). New chains like Bluestone Lane from Australia are still entering the market, but I've seen closures from Peets and the local Peregrine chain. Bluestone does a lot more with food service and is somewhat expensive, so I wonder how long they'll last in a recession, esp. given the unremarkable coffee.

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Re: Starbucks

Post by Super S » June 24th, 2020, 6:26 am

buckguy wrote:
June 24th, 2020, 5:04 am
I doubt that they are "in trouble". They already were planning to close 400 locations, which is a drop in the bucket for them. If the DC stores are any indication, they are redundant locations that probably are coming up for lease renewal and landlords have been driving out businesses with steep increases in these areas. Starbucks also plan to convert several hundred locations to takeout only---they've run takeout only stores in the past, but on a smaller scale. These are perfect for urban locations which run on a breakfast/lunch trade. The kiosks in stores other than Target never seem busy to me---I've always wondered what the model was for those.

Coffee shops in general seem to be hitting their peak (finally). New chains like Bluestone Lane from Australia are still entering the market, but I've seen closures from Peets and the local Peregrine chain. Bluestone does a lot more with food service and is somewhat expensive, so I wonder how long they'll last in a recession, esp. given the unremarkable coffee.
I think coffee shops hit their peak some time ago actually, when you factor in the many espresso stands that used to be around. There was a period of time where many businesses here had espresso stands out front, including local drug stores and large chains such as Home Depot. Many strip malls had trailers and other temporary buildings serving as espresso stands. There are several former espresso stands where I live which are sitting vacant or have been converted to other uses. Perhaps it's just a shift from independent operators to chains though.

Starbucks is a big company that won't suffer by closing 400 locations. They curiously moved from a very visible location in Longview's Triangle Center last year to a new-build location with drive-thru a few blocks away (and also only a few blocks from another Starbucks)

I will admit that I do not visit the coffee shops, as I prefer regular coffee (usually from home) and they just do not appeal to me.

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Re: Starbucks

Post by SamSpade » June 24th, 2020, 9:46 am

In 2011 after the last "great recession" they closed 600 locations in the USA -
https://www.huffpost.com/entry/starbuck ... l_n_113646
Some of these were duplicates in a mall or office complex, some just poorly located, and even a few that now bring chuckles - Starbucks O&O inside Haggen or Top Foods outlets (I believe they were the *first* to get in-store Starbucks nationwide).
Off Topic
As for competitor Dutch Bros, I'm surprised they did not build a shopping center near the kiosk or an interior with drive through model for your new stores in Reno. Dutch Bros. was so popular at a major Phoenix intersection, that the city eventually figured out a way to boot them out. In the county I'm visiting in Idaho, they now have three locations after starting with one small double drive through.

Personally, I find their take on espresso terrible, but all flavorings are "included" so those that are just starting the 'coffee' drinking or have a sweet tooth really enjoy the product. I can stomach their nitro cold brew over ice with half and half. It comes in a canned product they pour into a glass, similar to Guinness beer.

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Re: Starbucks

Post by TW-Upstate NY » June 24th, 2020, 11:58 am

Or maybe it's because of one simple fact-IT'S JUST COFFEE!!!!! I never really understood the logic of over-paying for something so basic. With so many people out of work now, this is probably the first thing to cut back on. Going forward, lots of people that are working from home now will likely continue to do and they're not going to be stopping at a Starbucks (or anywhere for that matter) on their way into the office. As an aside though, there's a Starbucks in my local Target that recently reopened. They've had a line of people waiting everytime I've been in the store.

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Re: Starbucks

Post by babs » June 24th, 2020, 10:19 pm

storewanderer wrote:
June 23rd, 2020, 10:59 pm
Today Starbucks announced they will be closing 400 US locations over the next 18 months.

I am noticing heavy promotion for Safeway Starbucks (25% off, $1 off, etc.) the past couple months on the app, as well as in-store PA announcements. I am also noticing 20% off Target Circle offer for in-Target Starbucks now. It seemed like Starbucks was already running quite a few promotions through its app before Coronavirus started (lots of buy one get one free offers at least I was getting).

I am under the impression Starbucks is in major trouble given the Coronavirus situation with fewer people "out" meaning fewer impulse purchases of drinks at Starbucks. However if they are struggling inside Safeway and Target (which have been very crowded in recent months) too when those places have been so busy, then it appears there may be bigger problems here.

Yet here in Reno a new chain Dutch Bros. has opened a few double drive through locations around town and I am noticing this place is busy at pretty much all hours. They stay open late (I think one used to be 24 hours but stopped), way later than Starbucks, and have a line going at 10 PM. I've watched their line and it seems to move very efficiently, like, they average less than a minute at the window per car. I have noticed also their pricing is lower than Starbucks. Many people I know prefer Dutch Bros. to Starbucks. I don't like drive throughs, so I don't fully trust the Dutch Bros. concept where I can't see the preparation area, so cannot comment on the product.

I am kind of disappointed to see this. Starbucks has always been a well run operation. I know their pricing is very high and they pay their employees well above what most other fast foods pay and have a much better benefit package.
A bit misleading. In the same announcement they also announced that they are also opening 300 drive-though or pick up locations. I've seen many locations close over the last few years and replaced by drive through locations. It's a smart move since these new locations are much busier.

No question that COVID is hurting them. Until cafes can fully reopen, they will struggle. Working from home, I would love to work at a Starbucks every so often.

Around here Dutch Bros does very well but they are actually a slightly more expensive than Starbucks. Their drinks are way too sweet for me and the all perky teenage girl staff is a little bit over the top for me. In the Portland market, they have opened several cafe locations due to the restrictions on drive-thrus in the city. I met the founder once, great guy and I hope his success continues.

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