A re we tired of Starbucks yet? Apparently not in Japan, where, after a dip into the red last year, the company reported a higher-than-expected surge in profits this past summer, fueled by cost-cutting strategies and a boom in sales of Strawberry Cream Frappuccinos. While a few unprofitable stores have been closed, overall Starbucks has boosted its presence here to 531 outlets nationwide.
And Japan is not alone, or even the most ardent, in its enthusiasm. The Seattle-based company now has nearly 6,000 stores in the United States and close to 2,400 overseas and in Canada, with new outlets setting up brew machines every day.
It is as if there were a planet-wide consensus to update Samuel Johnson’s famous dictum about 18th-century London, thus: “When a man is tired of Starbucks, he is tired of life.” (Casual observation suggests, however, that in the case of the ubiquitous coffee chain, “young woman” might be more accurate than the Johnsonian “man.”)
It was therefore hardly a surprise to read in the current issue of Newsweek that Starbucks plans to expand even farther and faster than it has been doing. According to the company’s chairman, Howard Schulz, “I think there are very few places we are not going to be able to go.”
To that end, Mr. Schulz told Newsweek, Starbucks would continue to challenge the classic retail tenet that it has merrily ignored from the beginning: Don’t locate your new stores close to your old ones, lest they cannibalize existing business. On the contrary, it will stick to the principle that appears to have worked spectacularly well for it (and, it must be said, for McDonald’s) over the years: Never make a customer cross the street if you don’t have to. And its corollary: If a well-located store is so busy that the line is out the door and around the corner, then it only makes sense to open another store around the corner.
There is no arguing with success. Starbucks’ profits are supercaffeinated, so its executives clearly know what they are doing. Nor can one deny the evidence of one’s own eyes in such high-density commercial districts as Tokyo’s Ginza, Shibuya and Roppongi. No matter how many Starbucks they open, it seems that people flock to them. Still, questions persist. What is it that all those people seek in Starbucks? What has inspired such lemming-like patronage? Above all, is anything being lost?
The company, of course, asserts that people go to Starbucks for the coffee, but hardly anyone else believes that. For one thing, a high percentage of its customers drink its noncoffee beverages such as Frappuccinos or teas. For another (or perhaps this is merely the reason why): Starbucks’ coffee seems a few beans short of a satisfying brew for those of us who find it bitter and watery. Still, whatever fancily named variety of caffeinated drink one orders, Starbucks coffee tastes the same in Tokyo as it does in New York or Sydney. It is a brilliant quality-control achievement, in a way.
Something else, then, must explain the chain’s mysterious appeal. A case could be made that it is Starbucks’ atmosphere — the comfortable chairs, the cheerful baristas — or even its variety — it is surprising how different one outlet seems from another, often with a nod to the ambience of the neighborhood or even to the other side of the street. Or maybe it is just that the world was finally ready for foam and cream and blobs of caramel.
Yet according to an industry analyst interviewed by Newsweek, “a good experience” is just one of the explanations for the company’s success. The other, he says, is precisely “real estate” — in other words, Starbucks’ willingness to saturate neighborhoods, cities, whole countries even, with outlets. If that seems counterintuitive or circular (there are so many Starbucks stores because there are so many Starbucks stores), that’s because it is. It is hard to think of a better illustration of the old adage, “Nothing succeeds like success” — or, as a wit once amended it, “like excess.”
There is a downside, naturally. We would hardly be the first to lament the ascendancy of “Frankenbucks” in terms of the blow to small businesses, local color and individuality of place, not to mention the ability to recognize good coffee. On the other hand, Starbucks’ rise has not been all bad. The company has introduced competitive pricing — some of those charming old kissaten are outrageously expensive — and, better yet, it has proved that people will patronize smoke-free places. That alone is almost enough to offset the cultural offense of inventing the Frappuccino.
So, no, we are not ready to boycott the monster quite yet. We will even drink a toast to its continued health — although some of us may do so with something other than a Starbucks brew.
By subscribing, you can help us get the story right.