What's wrong with Starbucks?

Chris Carris, owner of the Willow Glen Coffee Roasting Company in Willow Glen, said he lost 40 percent of his business when Starbucks moved in across the street. "They're like a strip mining operation," he said. "My business is slow. I'm still making money, but it always could be better."
Carris said that deep corporate pockets make it impossible for him to compete with Starbucks head-to-head. "They use predatory marketing techniques," he said. "You won't beat them on advertising. You won't beat them on placement. They can support and subsidize a store that can't do well. Now they've got three stores within a three-mile radius."

Public Outcry

In response to public outcry against the movement of Starbucks and other chains like Blockbuster Video and the Gap into neighbourhoods, city officials in San Francisco are devising what they call a "neighbourhood preservation package." The city believes that because chains are able to bid up rents, they threaten to drive out mom-and-pop businesses and destroy San Francisco's famed unique neighbourhoods. article >

Starbucks ala MC Escher >

Predatory Behavior

Dollars spent at Starbucks are not spent at a local business. Money given to such places does not stay in the local economy - profits go back to the corporate office. Does this sound like an attractive future for this community?

Predatory behavior in common with that of franchise corporations such as Starbucks, which move into a market built by local people, forcing a split in the revenue and the eventual collapse of the local business that cannot afford to share the market with the interloper's deep pockets.

For the independent cafe, Starbucks spells doom...

Starbucks openings from coast to coast have sometimes signaled the death knell for the mom-and-pop shop. In cities as diverse as Milwaikee, New Orleans and Portland, Ore., a beloved gourmet coffee house disappeared soon after a Starbucks moved in close by.
And when Starbucks eyed Saratoga Springs, N.Y., it offered to buy Madeline's Espresso Bar. After the two sides couldn't agree on a price, Starbucks opened across the street.

One these coffee battle grounds, the independent cafe closed or moved. article >

A corporation bent on becoming a global powerhouse

Now, Starbucks is waking up to the grande challenges faced by any corporation bent on becoming a global powerhouse. The stores may be oases of tranquility, but management's expansion tactics are something else. Take what critics call its "predatory real estate" strategy--paying more than market-rate rents to keep competitors out of a location.

Still, the company's strategy could backfire. Not only will neighborhood activists and local businesses increasingly resent the tactics, but customers could also grow annoyed over having fewer choices.article >