15 November 2007


Starbucks has about 10,500 locations in the U.S. which is about 3,000 more than it did just 2 years ago. In Seattle, there is one Starbucks for every 10,000 residents. The company plans to almost double its presence in the U.S. by one day having 20,000 locations.

That doesn't mean there isn't room for more Starbucks!

Vermont, the state with the fewest Starbucks locations, has just 4. And now Bay Ridge will have 4, too. Our little neighbourhood will have as many Starbucks as the entire state of Vermont. I love it.

Just as articles were hitting the wire about Starbucks earnings reports and fear of market saturation, I spied a new Starbucks opening up on 85th and 3rd Avenue! A few doors down from Areo; dangerously close to Caffe Cafe which has been there for years. Has anyone seen the movie You've Got Mail? When the evil F-O-X Books fucks up Meg Ryan's whole shit? It's a cute movie.

Starbucks in Bay Ridge has never opened up across the street from a mom & pop coffee haus and frankly its because we don't have many. Caffe Cafe is just about the only one that remains.

Well now we'll see what happens to the lowly Caffe Cafe. I hope it survives.

Caffe Cafe - 8401 3rd Avenue

The concern in business land is that Starbucks has been adding locations so quickly that the new stores are cannibalising the old ones to the point where the chain can't increase its same-store sales at the rapid pace to which investors have grown accustomed.

In the past year, shares of Starbucks have fallen about 37%.

More broadly, Starbucks' recent attempts at expanding its brand have had mixed results. While its strategy to sell music has been a hit with certain clay-like customers, the films it has promoted in stores have had only minimal box-office success. Some analysts say the chain has fallen behind on creating enticing new beverages and its breakfast sandwiches have created little excitement.

Make good coffee. Charge an arm and a leg for it. Do that well and that's it.

What has investors worried is that for the past 2 quarters the growth in transactions per store in the U.S. has been flat after climbing for several years. Same-store sales, which measures sales in locations open at least a year, have hovered in the mid single-digit range, after years of growing at a high single-digit or double-digit rate each quarter.

Read more: At Starbucks, Too Many, Too Quick? By JANET ADAMY {WSJ}

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