Big Box Panic

Article Tools

Image Gallery

Print

E-mail

Comments

RSS

In 2002 they got one of their wishes when Starbucks, through its Urban Coffee Opportunities program, opened a store in Hamilton Heights. But the franchise did lackluster business, and after a few years the chain’s Seattle headquarters moved to pull the plug on it.

Elsewhere in the country, activists were staging protests against Starbucks outlets that they said were homogenizing their neighborhoods. In Hamilton Heights, the protests went the other way. According to the New York Times, “residents have mobilized to save their coffee shop,” pressuring corporate headquarters and community leaders because the store was providing jobs and, they hoped, economic benefits.

When the shop finally closed, a community leader observed that Starbucks hadn’t attracted neighborhood support “because of a lack of cultural affinity. Most of the people [in Hamilton Heights] don’t go to hang out in a café. If they hang out, they hang out on the sidewalk. And it’s mostly old men talking about the old days.” Instead, residents preferred Cuban coffee from La Flor De Broadway, a hole-in-the-wall coffee shop with no seats, no Bob Dylan CDs on sale, no chrome espresso machines. It did, however, serve a strong 80-cent cup of coffee.

In 1998 Jon Cates faced a similar challenge from Starbucks. Located in the bustling Westport neighborhood of Kansas City, Cates’ Broadway Café, a haunt of local hipsters, students, and artists, discovered that the Seattle coffee Goliath was slated to open an outlet on the same block. The café’s supporters sprung into action, papering the windows of their new neighbors with leaflets and eventually appealing to the city zoning department to stop development. When that was unsuccessful, the shop’s owners collected thousands of signatures in protest. But that too failed, and Starbucks opened for business.

Four years later, Cates reluctantly conceded to the Wall Street Journal that his business was thriving. Rather than defeating the outsiders with zoning regulations, they won with old-fashioned competition: “Starbucks helped our business, but I don’t want to give them any credit for it.” Eight years after Starbucks invaded Westport, Cates had actually expanded his business, opening a neighborhood coffee bean roastery that supplies other cafés.

Phoenix Coffee Co. in Cleveland Heights, Ohio, an independent café that battled Starbucks for five years, also found the Seattle competition to be a boon for business. Phoenix founder Carl Jones told Cleveland’s Sun Press that “while Starbucks was there”—the store has since closed—“our business grew by 20 percent a year. We’ve been grateful the corporate giant moved in, since its presence had a magnetic effect on the caffeine crowd.”

By understanding local tastes, Newbury Comics, Phoenix Coffee Co., La Flor De Broadway, and Kansas City’s Broadway Café demonstrated that localization, customer care, and authenticity are far more effective means of fighting larger rivals than agitating for anti-chain legislation. In American business, it seems, David can still slay Goliath.

RSS | Comments | E-mail | Print