Cynthia Cheng

To many people, Starbucks is a way of life. You get up in the morning, get dressed and walk down to your nearest shop for that grande latte that you always have, and off you go to work. Some even use Starbucks as their office! Starbucks is so much a part of North American city culture these days. There are neighbourhoods in cities where one could find two, three or even more shops within close proximity in the neighbourhood. As a matter of fact, I think Starbucks has replaced Macdonald’s as most missed by North Americans travelling abroad. I was recently in Shanghai for the first time. Like any tourist in a foreign city, I felt strange and insecure. Then I saw the Starbucks sign, and I immediately felt at home.

However, the Starbucks era may be coming to an end, at least in the United States. Recently, Starbucks announced that they will be closing down 600 US-based stores, due to lower sales. Basically, what they’re doing is closing stores that are close together, meaning that people who are used to one store will have to make the two second trek across the street to the other, more profitable store. Of course, there might have been strategic reasons for Starbucks to open multiple stores in certain areas. For one, it allowed Starbuck to dominate the targeted market, took over all the choice store locations, and hence left no room for competing chains to exist. However, even the best strategy cannot fight reality.

With the economy slowing down, many people are not buying “designer coffee” as often and are opting for more affordable versions at places like Dunkin’ Donuts, Tim Hortons or McDonald’s. In addition, having multiple stores close to each other does not necessarily increase the number of coffee drinkers. It merely means that each store will have fewer customers. Some malls, such as Pacific Centre in Vancouver, have at least two. I was recently in Manhattan and there were at least four Starbucks stores within walking distance of the Time Warner building in Columbus Circle. It’s crazier in the Yorkville area of Toronto, where there are at least six within a five minute walk from Holt Renfrew on Bloor Street.

However, this cutback in number of stores is not good for customers. There are people who go to specific shops because they like atmosphere. While a Tall, non-fat, half-caf is a Tall, non-fat, half-caf, the atmosphere is something completely different. One might like the Starbucks on the northwest corner of a certain street because it offers something that the Starbucks on the southeast corner of the same street does not. And of course, there are the baristas. Some people just prefer certain people to make their coffee.

Lastly, for a long time, Starbucks has been a success story. Having coffee in a Starbucks store gives its customers a sense of being part of the success, a feeling of being successful. I hope this end of the expansion era does not take that mystic away.