I wanted to bring up the matter of Starbucks. Doesn't sound like a topic with a lot of heft, but its decline over the past year is, I think, a perfect analogy for what has happened to us here in the United States, and illustrates what I think is a dangerous character flaw in the American psyche. The simplest way to describe it would be to call it the notion of wanting more just for the sake of wanting more. 2008 was a rough year for the chain that was once a darling of Wall Street. Built from the ground up with one shop in Seattle in 1971 (they still only had four shops in 1982) they grew to have some 16,000 stores around the world, most of them, of course, in the United States. As the recession took hold last year, Starbucks watched its quarterly profits decline until finally, like the economy itself, the business contracted --they closed "under-performing" stores, cut nearly a tenth of its workforce, and scuttled plans for a "full-scale world takeover." They've been adjusting ever since, particularly since McDonald's began encroaching on their territory.
Just last week, for the first time, the chain announced it was cutting prices on regular coffee by five to 10 cents per drink but more complex drinks like frappacinos will increase as much as 25 cents. I think this may be based on the "pay by the syllable" business model.
Call it a guilty pleasure by I was pleased to see this unfold --partly because I prefer to support local businesses wherever and whenever I can (we have a locally owned shop in my neighborhood where I prefer to go when I'm out and about) and because personally, I was never a fan. They were everywhere. There are three shops within a mile of every home. It seems they're on every corner. The end of the universe, as comedian Louis Black puts it. When they opened a store in Vienna, Austria in 2001, it just didn't seem right, and I wrote them off. Some of us perhaps indulged in a little schadenfreude, watching a pricy, somewhat snooty, and "not really a decent cup of coffee" place take its lumps. Indeed, sensing a certain resentment, the chain has just launched a pilot program where the name Starbucks will not even appear on some shops, instead giving them monikers that sound independent.
Perhaps in the spirit of this anti-Starbucks sentiment, there has been a renaissance of independent coffee shops where I live and elsewhere, according to an article in my local paper, the Sacramento Bee:
This new breed of shop has arrived in a tsunami known as the Third Wave in the midst of Starbucks' retreat. The Goliath is reeling from overexpansion and automation, closing about 900 underperforming stores, including seven in the Sacramento area.
…While throngs continue to buy at Starbucks, many coffee lovers are choosing to support David rather than Goliath – sometimes for the coffee, sometimes for the change in atmosphere, but often because it fits better with their personal outlook.
Starbucks set out a goal for itself: It wanted to be the biggest coffee shop in the world with the most stores in the world --it was almost as if they wanted to do it so they could say they did it.
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They wanted bragging rights. This really crystallizes when you realize that 70 percent of the stores that closed, opened after the start of 2006, when the real estate meltdown quietly began to collapse --a parallel to and an indication that over-expansion ultimately was the economy's undoing. Greed. Wanting more when you didn't need it, being the biggest when it really doesn't matter, owning the largest when it does little for your bottom line, setting shallow goals and pursing them precipitously instead of setting realistic goals and planning carefully to account for long term consequence.
And as a result, we find ourselves asking, how did we get here and why didn't we think of this before we arrived?
This is a trend that started maybe 10 or 15 years ago, almost like a movement where people wanted more luxury, more premium items. We got this idea that things had to be nicer and nicer all the time and a little more high end and the cars were a little fancier and a little faster and a little bigger and just a whole culture of making it… more. We wanted more. Think about what we pay for labels. It's not enough to have a handbag; it just has to be a Louis Vuitton, and if those shoes weren't Manolo Blanic, forget it, and look at this case for my cell phone made by Pierre Cardin. For the cell phone?
Even the cell phone, as ubiquitous as Starbucks --it's something of a status symbol to have a Blackberry or an iPhone --because it can do what? It can do… more. It's a phone. I don't need a camera, I don't need to text someone with it, I don't need to check my e-mail. I have one in case I need to make a phone call. I know; I'm tilting at windmills. But look what a culture of more has done. Fancy coffee, fancy beer, fancy phone, premium labeling --it's like the concept of "premium" has taken over as a marketing tool for consumer items, a trend that seems to have been around for 10-15 years and the closing of hundreds of Starbucks stores seems to put a bulls eye on this trend, defining it for what it is: A culture of more, and maybe it tells us something about why the economy is where it is.
Someone said somewhere that one of the first things you've got to do to start saving money is to stop going to Starbucks. When we find ourselves asking, how did we get here and why didn't we think of this before we arrived, the operative question here is, how did we talk ourselves into saying it was okay to pay $5 bucks for a cup of coffee? How in God's name did that happen?
You can get a regular cup of coffee for a buck in most places, and really, all you have to do is make a decent cup. Not that briny slop you get at most chain restaurants. Sorry, but the coffee is lousy at most restaurants and lousy and most breakfast joints, even local places where they serve a pretty darned good breakfast.
Not that there aren't exceptions. Surely, the finer restaurants in your area will serve a good blend --perhaps in part, influenced by the heretofore success of Starbucks, which may have affected palettes. If you've ever had the good fortune to eat at an Original Pancake House restaurant, they serve excellent coffee, and how can you not have a good cup of coffee with your breakfast. And they were serving great coffee long before Starbucks ever ventured out of Seattle.
I am not a Starbucks drinker but my wife, who is not a coffee drinker, pays $5 bucks to drink Starbucks. Me? I've got a coffee machine at home. And even there I think, kind of extravagant. I prefer the old coffee pot from my parents' house but we do have that typical machine.
I saw an espresso machine somewhere for $18-hundred bucks. Think about that. 20 years ago, who in their right mind would've spent $18-hundred on a machine that makes coffee?
So I guess part of the problem for Starbucks is that it's frivolous. It's a perk. And I'm thinking, if you sell a luxury item --and if somebody thinks $5 for a cup of coffee isn't a luxury expense, please let me know-- because I'm thinking that $5 for a cup of coffee is a luxury expense, and if you're in the business of providing a luxury expense on a scale as massive as Starbucks, you might think twice about goals like opening 2000 stores across the country by the end of 2009 when we all know, or we have to learn the hard way, that economies go up and they must come down and that careful planning is absolutely necessary to survival, especially if you have a successful product. And Starbucks has been a successful product, but it's been a mismanaged one. Radio is a successful product, but it's been horribly mismanaged by companies whose pursuit was to own more radio stations than anyone else. Owning your own home is an appealing idea, easily corrupted by greed and the notion of wanting more just for the sake of wanting more. That's not good enough. Don't you agree? What happened to common sense? Pragmatism? Why does one feel the need to have the biggest plasma TV screen in the neighborhood? Bragging rights? Is that part the thinking that convinced us it was acceptable to pay $5 for a cup of coffee?
Now, I'm certainly curious if Starbucks is a place where you've cut back on your expenses to curtail your budget. Have you stopped going there? What do you do for coffee? I'm certainly interested in that, but I'm also interested in how you think we might've gotten to the point where we found it perfectly acceptable to spend $5 on a cup of coffee. What is it about us that decided this was not only acceptable, but expected, sort of like, "Doesn't everybody go to Starbucks?"
Ultimately we realize that if we never set foot into a Starbucks again, it won't really change our lives but it has always seemed symbolic to me about who we are, how we got here, and the price we're now paying for that trip. And, given that the chain has clearly been humbled by some harsh economic realities, I wonder if we've learned some hard lessons about our own greed, our own excess, and a realization that having enough is enough and having too much is not only unnecessary, but it can also be burdensome.
Giving up Starbucks? Not? How'd we get here? Is Starbucks a metaphor for a way of life in America that says excess?
Louis Black - The End of the Universe
Comments
McDonald's really does have excellent coffee, and it doesn't cost 4-5 dollars just because they use cafe or latte in the name. All those hoity-toity psuedo-elitist who constantly remind us commoners about their intellectual supremacism, were all too happy to fork out 3-4 times more for a cup of coffee just because they gave it an Italian or French name. I take my coffee just plain black, thank you very much.
I mean no offense to the author and other readers, but this must be the 30th time I've seen this metaphor used in the past year. The Starbucks budget, the Starbucks real estate bubble, the Starbucks effect and so on. We've got to come up with a new corporate analogy to describe our descent into this recession.
Snake - No offense taken. I actually talked about this very idea on the radio a year ago (I'm a talk show host). I only brought it up because of the story in my local paper about the rise of independent coffee shops, something I for one am glad to see.
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