How Do We Survive Starbucks?

celement

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Apr 17, 2005
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Modesto, CA
When I bought my drive through only location I knew there was a Starbucks 2 blocks away, a second one about 10 blocks on the opposite side, a third one coming soon which would also have a drive through about 10 blocks in a 3rd direction, and now they are working a 4th ... yep I'll have them on all 4 sides of me by the years end. The third one just opened and has "hit" me harder then I expected - its the one with the drive through - as will the 4th.

Do any of you veterans have good solutions to help survive this complete market dominance on their part? Our city is 200k, my blvd has 40k daily traffic counts, and there should be enough to go around. Since this third one opened I'm down 20% in sales. I can't imagine it being anything else as we've had nothing but upward progress until this third one opened.

Sadly we have the resources to open a second location, even a third, but I'm not even profitable on my first yet and just can't see opening a second if we can't even make a pay check?
 
competing with Starbucks

Google the topic. LA Times did an article on a local shop thriving against Starbucks. I found this, too:
http://www.retaildoc.com/sales-training ... rbucks.pdf

We're opening our first later this year. Starbucks is looking but not sited in the market other than inside a B&N bookstore. Think about counter-branding -- if you look like Starbucks and offer what Starbucks has, why not just go to Starbucks?

What can differentiate you from Starbucks? This is where we're putting 99.9% of our marketing thinking. So far, well, works on paper!

Good luck.
 
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celement

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Modesto, CA
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excellent article - thanks

I didn't see that one...it was a helpful in many ways...I'm in stage 3...got 4 to get through and on to 5...
 

Twitch

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Mar 9, 2005
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Sacramento, CA
Hey Celement... don't go down without a fight.

You've probably read Schomer's article, but I'll post the link in case you haven't.

http://www.lucidcafe.com/cafeforum/schomertable28.html

My favorite tactict that was given by a friend was to have a bunch of kids hit the starbucks lot every morning and put "Friends don't let Friends drink Starbucks" bumperstickers on all the cars.... but there may be problems with that strategy in the legal dept....
 
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celement

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Apr 17, 2005
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Modesto, CA
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I think I have it Good

while I'm soon to have a 4th one on the 4th side of me only one is within a few blocks...the 2 newest one's in our town are directly across the street from independents like myself. I'm not sure I'd rather have them right across the street or two blocks away? I'm thinking closer would be better.

I noticed my closest independent competitor, a pure coffee house (I'm a drive through only) did pass out flyers in their parking lot last week...wonder how that went over....

Thanks for the articles...I'm printing them for my employees too.
 

bamaster

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Jun 3, 2005
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Houston, TX
I think the answer is.. you don't fight Starbucks. You can't beat them at their game, they are simply too good at it.

Instead, you find a way to be different... ideally you'd want to compliment them. Starbucks owns Jamba Juice and here in Houston you most Jamba Juice locations are in the same strip mall as a Starbucks. This is so that folks who don't like coffee, or are simply health nuts, can easily have a fruit smoothie while their friends do lattes.

On every board I see the anti-Starbucks threads. Personally, I think without Starbucks there would be a much smaller coffee industry. Without the big boys there can be no little guys.
 

Boaz Bagbag

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Jul 12, 2005
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For real coffee lovers, the key is:

1. in Summer time you could sit out
2. Wireless Internet Connection
3. You can have your favorite coffee with a cigarette
4. Try to give your shop more European/Modern look
5. If area alows, try to be open as late as possible

If you follow this criteria you'll be just fine!
 
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celement

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Modesto, CA
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Great ideas...but some don't work for a drive through - I even added free wireless internet hoping people would park near by and use it from their cars...no luck...bad idea...wasted $90 a month and in a year long contract before I can quit.
 

SFG75

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Dec 29, 2004
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Midwest
celement said:
Great ideas...but some don't work for a drive through - I even added free wireless internet hoping people would park near by and use it from their cars...no luck...bad idea...wasted $90 a month and in a year long contract before I can quit.

You might wnat to try some new, exotic blend that others don't have. Find some specialty drink that you guys do the best and market the heck out of it. I routinely go to a drive-through place over a walk-in because the mocha's are much better. They push that fact through newspaper ads and radio ads. Believe it or not, it works IMHO. :)
 

Jumpin Java Bean

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May 27, 2005
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SFG75's suggestion is definately worth thinking about. A little partnering might help (apparent if not actual) - that is, the general public might not really know what "Big Train" is, but almost everyone has heard of Ghirdarelli. Maybe advertise an Ultimate Ghirdarelli Mocha.

I'm planning to go out in my truck with delicious organic cookies and muffins wholesaled to me from a local organic, whole foods cafe - even vegan versions are offered, and they are very good. Could this help you grab a niche? My daughter was a vegan for years, and she loved her soy lattes. She would go far out of her way for a vegan snack, which was alwalys hard to find. Starbucks is loaded with chocolate/marshmallow/whatever confections that can bring tears to your eyes and fat to your belly, but they sure aren't made with certified organic ingredients.

Or consider a social mission: Fair Trade, Shade Tree Protection, Songbird habitat. It's not cynical to package ideals for commerce if you really feel strongly about them. I am always drawn to merchants that make me feel I can be helping a wider circle. The logo for the Equal Exchange company is getting more recognizable to many consumers.

Good Luck, hope this thread keeps generating ideas for you.
 
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celement

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Modesto, CA
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New ideas are helpful. I get an email when this thread is replied to so I can see whats new. The only good thing I can say now about the Starbucks is I'm finally surrounded and I got to believe they are done for some time. I literally have one in all four directions away from my drive through. The furthest away is 1.5 miles, the closest is 2 blocks.

I'm in Modesto, CA which isn't an area that would cater to the socially responsible element like SF or the Bay Area would. And I've noticed at least one of the local coffee houses is trying hard to push that agenda and its not all that popular. I did think about advertising on an AM station during the Rush Limbaugh show...and suggest they visit the "Right Lane" because not all coffee establishments are left sided. Then I could say, but of course we have a left lane for the politically correct :)

We do specialty drinks - we name them after dogs....we have the Beagle, the Dalmatian, Blushing Dalmation and Chihuahua. We're getting ready to launch the "Bichon Frieze" Fruit Chillers next week. (cream and Jet tea blends).

But sadly I have to admit I'm hammered. My "hut" went from 40 cars to more then 150 since I bought in Sept. last year. We were averaging 155 cars a day in May before the last two Starbucks (both drive throughs) opened. Now we are down to 110 per day. It hurts to know we've lost so many people to them.

I've been following the Retaildoc.com How to Survive Starbucks article and making everything clean, neat, safe, and am working over the baristas too. But we're still hammered.
 

Producer

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Jul 18, 2005
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May I ask a few questions?

I am a coffee producer and I am looking for export opportunities, but I want to explore the market first. My crops are in Huatusco,Mexico. It is a region with a long coffee tradition. The quality is good and I can supervise personaly the best defect free preparation (European) and beyond . I can not offer organic coffee though.

My business is small, so I don't know if a can supply a store for a complete year, but I think I can offer very good prices.

Usually we make a blend of Arabica and Robusta varieties because full Arabica is a bit acid. I am afraid that that means that we can not match the flavor from season to season.

I don't know if I wil sell to stores or try an internet route. My goal is to sell roasted coffee to increase the profits.

All this means I will need some infraestructure there and see costoms cost. I don't want to take any chances.

Thanks.
 
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