business news in context, analysis with attitude

Both the New York Times and the Los Angeles Times have had stories in recent days about Starbucks stores in their markets that are closing. Some excerpts…

From New York Times, about a store closing in Newark:

“When a Starbucks opened on Broad Street here almost eight years ago, it was not seen as a bland new spigot of a corporate coffeepot, but as a gathering place whose very existence would have seemed impossible a decade before, a symbol of a knocked-down city’s attempts to get up … So when Starbucks announced last week that the Broad Street branch would be among the 600 stores that the coffee company is closing around the country, the reaction here was especially emotional, a mixture of anger, disappointment and frustration … The closings of hundreds of the coffee chain’s branches have certainly caused consternation in other places. But the cafe in downtown Newark is in some ways unique, a high-profile sign to all the people who fear the city that life is normal — if one accepts that part of ‘normal’ is the ability to buy a slightly expensive cup of coffee and a scone in the morning.”

And, from the Los Angeles Times:

“Starbucks is about more than a cup of coffee in many neighborhoods. That block-letter logo on a strip mall marquee can be considered a public stamp of approval, a symbol of hope, a suggestion of brewing economic vitality.

“That's why a new Starbucks in the inner city tends to produce the kind of excitement that suburban neighborhoods reserve for the debut of a Bloomingdale's.

The two South Los Angeles Starbucks on the closure list are fairly new, comfortable and sleek. Both -- one at the corner of Martin Luther King and Vermont; the other a few miles away on Crenshaw and Vernon – are products of a collaboration with another marquee name, Magic Johnson, and his economic development company … The losers are those loyal customers who considered it a privilege to join the cultural mainstream, sipping overpriced Frappuccinos. For them, losing the neighborhood Starbucks is a rebuke that stings.”

"’It's a comfortable place. A safe place," says one local resident and customer. ‘And a chance for us to have access to luxury. Just like everybody else’.”

KC's View:
Starbucks has issued a statement saying that it is “humbled” by some of the reactions to the 600 announced store closings, especially in inner city neighborhoods. And it should be.

Rudyard Kipling once said that “a woman is only a woman, but a good cigar is a smoke.” Sometimes a coffee shop is just a coffee shop…but sometimes it is something more. Something compelling. Something that matters.

If those stores aren’t making money, there’s no reason for Starbucks to keep them open. And the current economic climate offers plenty of good reasons for the company to move swiftly and decisively to become more profitable.

But…it is at least worth considering the broader implications here. The notion that a coffee shop can be about more than a cup of coffee….that speaks eloquently about the role of retail in communities, and perhaps even of a higher calling than just making money. Sure, the bottom line is important and black ink is better than red ink.

It seems to me, though, that the goal to “be something more” should be factored into every store’s operating plan, no matter where that store is or what the demographics are of the customers who shop there.