Like Wal-Mart, Starbucks now facing some consumer animosity

By Anthony Medoro
Collegian Staff
February 6, 2008

Take a look around your local neighborhood and you may have noticed Starbucks stores popping up across the street from each other. More and more are showing up in unconventional Starbucks neighborhoods. For instance, a visit to La Salle University after the shopping center at Good Shepherd is finished may hold a Starbucks. But Steve Schultz, the CEO of Starbucks, is learning that this vast increase in the number of stores being built may have done more harm than good.

As the company continues to expand, Starbucks is being pooled with American behemoths, similar to Wal-Mart and Microsoft, reaping a great amount of strength and weakness. Starbucks’ constant growth and over-saturation has had a harmful impact on local community coffee shops, forcing the corporation to become an enemy for consumer activists who want to keep Mom-and-Pop businesses alive. This, of course, includes independent coffee houses that have long served the communities around them.

Many communities throughout the country have felt the destruction that comes along with the entrance of a Wal-Mart, the world’s largest retailer. “When a Wal-Mart appears in a local community small businesses suffer, and are often forced to shut down because of their inability to compete with Wal-Mart on price and the number of offerings they can put on shelves,” said Associated Content writer Mike White.

The failure to compete has allowed Wal-Mart to secure a huge portion of the market share in every community that it has entered. As Starbucks has grown so rapidly they are now confronted with this same issue, and find themselves experiencing the burden of community activism. Almost overnight, Starbucks moved away from a posh bohemian place to enjoy a latte to a coffee juggernaut at the loss of its once unique charm.

Nearly 10 years ago the earliest Starbucks could only be found inside Barnes and Noble bookstores. Since that time, Starbucks has exploded with expansion; the coffee seller now has isolated, stand-alone shops in every major city across the globe. In 2008, Starbucks intends to launch about 2,500 new stores.

However, this rapid growth has triggered some negative consequences among consumers. They have become irritated when they see the local coffee houses they have visited all of their lives deteriorate as a result of the Starbucks effect.

Starbucks has also decided to reduce the prices of some of their coffee in order to compete with brands like Dunkin’ Donuts as well as McDonald’s, who has recently added a whole new array of coffee products at their new McCafe. Starbucks has added a 99-cent coffee deal onto the menu as of late. But the strategy hasn’t worked out as well as the company would have liked. Most people who purchase Starbucks coffee buy it because of the brand image. Over the years, Starbucks has been successful in creating the image of the affluent or upscale coffee chain. Devaluing the coffee tarnishes that image and has confused consumers about the Starbucks’ identity.

Consequently, Web sites such as ihatestarbucks.com are popping up all over the place. On these sites consumers are instructed state-by-state of places they can go to receive good coffee that is not made by Starbucks. The consumers are not the only ones who are not pleased with the Starbucks Corporation. Lately, some employees have also become unsatisfied.

“Dozens of Starbucks’ baristas are fleeing the company to seek employment at less corporate coffee houses such as High Point Coffee and other startup coffee spaces,” said White.

This sentiment toward Starbucks is spilling into entire communities. Several of these consumers are aware of the litigation Wal-Mart encounters in some communities when it attempts to build a new superstore. For the first time, communities and consumers are instilling this pain on Starbucks.

“Beyond simple saturation and brand-weariness, communities take a great deal of pride in their local businesses, even when Starbucks may sometimes sell better coffee, with more choices than their neighborhood business,” said White.

It seems that the local shops and giant coffee corporation cannot thrive in the face of each other in most communities. In a few local neighborhoods Starbucks’ unable to survive, not the local coffee shops. Perhaps the Seattle-based company has become a victim of its own success.

medoroa1@lasalle.edu