It’s true. In the last few years, a growing number of communities have begun to look askance at the rapidly expanding Seattle-based coffee company. Some have taken it on and, in a few cases, kept it out. Not that Starbucks is running scared. The compa- ny is enjoying phenomenal growth, with stores opening daily, expansion overseas and a raft of new products, from ice cream to CDs. It’s even begun a test of the ultimate market move: supermarket sales. For long-suffering American coffee drinkers, all this is probably welcome news. But as Starbucks plans its next offensive, it is grappling with a dilemma: how to get big and stay friendly at the same time.
As much as Americans love a corporate success story, they are increasingly ambivalent about the retail elephants lumbering into their neighborhoods. It’s not just Main Street’s fear of the discounter on the edge of town, or frustration with the latest cookie-cutter fast-food joint. The sheer ubiquity of chain stores, no matter how elegant, can be a threat to a town’s unique character.
At first glance, Starbucks seems a far cry from the activists’ usual opponent. Wal-Mart has 150 times its sales; McDonald’s, 12 times as many U.S. stores. Its corporate culture is very ’90s: even part-timers get benefits, vacations and stock options. And, of course, Starbucks is about quality, not the classic seduction of low prices or convenience. This is the company that helped teach Americans that real coffee cannot come out of a vending machine.
But Starbucks’ ambitions put it squarely in the company of the big guys. It has 970 stores, up from 116 in 1991, and plans for 2,000 by the year 2000. Tokyo got its first Starbucks last month, part of a plan that targets the Pacific Rim before going, perhaps, to Europe. Allied with Dreyer’s, PepsiCo and Capitol Records, it is slapping its logo on ice cream, bottled drinks and CDs. “We are focused on being The Brand on a worldwide level,” says senior vice president for marketing Scott Bedbury, former ad chief for Nike.
That’s what some people find scary. When Starbucks tried to lease a corner store in the small Minneapolis community of Linden Hills two years ago, many residents saw danger signs: more traffic, higher rents, a magnet for tourists, all combining to drive out not only the local coffeehouse, but the butcher and the hardware store. “This is not anti-Starbucks,” says local council chairwoman Debby Magnuson, “it’s about saving the sense of community.” Magnuson, Anne Marie Kronick, cochair of the development task force, and 300 other residents showed up at a meeting to confront Starbucks; six months later the company walked away. Last spring it abandoned plans for Glenview and Claremont-Elmwood, two San Francisco East Bay communities. Another battleground: the “inland empire” east of Los Angeles.
Such battles are still rare; Starbucks has plenty of stores in Minneapolis, San Francisco and L.A. But they’re a frustrating surprise. “We sort of feel stunned,” says Bedbury. The downside of success was one topic on the table at a company retreat last week. They know customers don’t want to be “themed to death,” says Bedbury, don’t like “massification of culture. We don’t intend to make [that] mistake.” One of Starbucks’ answers to communities’ concerns is to “tie the store to local culture,” says Bedbury. Not all are high-turnover stops; they’ve found it “surprisingly profitable,” for example, to design stores for the customer who lingers. A new one in Seattle’s Queen Anne neighborhood even has a fireplace. But that won’t be much comfort to the local coffeehouses that have counted on just such customers to keep them alive.
Even if the stores look and feel different, the trend is still one of “homogenization,” says Edward McMahon, an Arlington, Va., lawyer who represents communities on development issues. Fewer, bigger operators, whether Pizza Hut or Starbucks, mean tougher competition for the smaller merchants that make one town–even one country–different from another. “There’s a slow destruction of cultural distinctiveness,” says McMahon.
It makes some wonder about Starbucks’ own beginnings. Chairman Howard Schultz founded the company after a visit to Verona and Milan in 1983. Charmed by the Italian coffee-bar culture, he vowed to bring it to America. Those of us who longed for a comfy cup of java should be grateful. But what happens when the next generation of entrepreneur visits Italy, and sees … Starbucks?
