Starbucks, Walmart and Urban Renewal

Downtown Starbucks

I am usually very weary of most national chains (and some regional). I like it when the greatest about of my money winds up back into the community and city where I am shopping. I am not a complete elitist, my wife and I shop at Aldi and sometimes go to national/regional chain restaurants (though I do prefer to go to local restaurants).

Wal-Mart’s and  its other Big Box relatives will always frustrated me, and I don’t think that I will ever be convinced that that type of “downtown/community killing” business if beneficial for anyone in the long run. However, I was humbled by an article I recently read. In the article, Taylor Clark argues that rather than stifling the mom & pop coffee shop, that Starbucks actually enhances this local business. This happens because Starbucks creates a coffee culture where it there maybe other wise would have been. People know Starbucks is coffee and coffee is hip so more people go to coffee shops (even if not Starbucks).

 Clark clarifies his argument further by explaining the financial and social differences between Starbucks and the typical big box business.

 

In contrast to so-called “downtown killers” like Home Depot or Wal-Mart, Starbucks doesn’t enjoy the kinds of competitive advantages that cut down its local rivals’ sales. Look at Wal-Mart. It offers lower prices and a wider array of goods than its small-town rivals, so it acts like a black hole on local consumers, sucking in virtually all of their business. Starbucks, on the other hand, is often more expensive than the local coffeehouse, and it offers a very limited menu; you’ll never see discounts or punch cards at Starbucks, nor will you see unique, localized fare (or—let’s be honest—fare that doesn’t make your tongue feel like it’s dying).

 

Along this his argument, I think that fact that many Starbucks has figured out a way to be trans-locational also attributes to this positive relationship. Starbucks truly IS everywhere. Rural, Suburban, and Urban America all have Starbucks, but each store has meshed elements of branding and local flair. Most Starbucks look similar, but they are not as identical as Wal-Mart superstores. Some Starbucks are drive-ups, some have concrete slab parking lots, and some are urban and have only on street parking.

Starbucks can be developed along side efforts for downtown revitalization, as well as with neo-urbanism. Big Boxes just can’t too that and because of that they have to be isolated. Unlike Starbucks it is more typical for Big Box stores to be the only player in the game, rather than just the strongest player on a team.

 But, like many all-star players Starbucks still wants to dominate. Clark acknowledges that Starbucks still has a desire to take over the game, sometimes through intimidation.

 

. . . I hasten to point out that the company isn’t exactly thrilled to have this effect on its local competitors’ sales. Starbucks is actually trying to be ruthless in its store placements; it wants those independents out of the way, and it frequently succeeds at displacing them through other means, such as buying a mom and pop’s lease or intimidating them into selling out.

 In conclusion, I still don’t really like most national chains, mostly because of their Manifest Destiny attitude towards other businesses, but I do think that rightly utilized they are great assets to our economy and cities. Perhaps if more national chains work together with ethical community development and with local business (maybe we would see more urban/downtown “superstores” using vertical space rather than sprawling) the economy and society would have great benefits.

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3 thoughts on “Starbucks, Walmart and Urban Renewal

  1. I tend to agree. I’m immensely frustrated by American consumers’ own self-destructive plunge into deeper materialism and poor longterm economical choices (as in heedlessly condemning local businesses’ future viability). So I “shy” (this is not the word) away from Walmart and the like and have been tempted to do so with Starbucks, as well. However, the coffee culture encouragement thing you’re describing is a real phenomenon, I believe. I’ve read a couple of other entries on your blog where you mention being with your wife at a coffeehouse and where you mention doing things you love in the community where God’s put you. I do support privately-owned coffee joints here in Rockford IL, but like you, I also can’t deny that SBux’s presence seems to have increased the general interest in the social-hub capacity of coffeehouses. While it seemed to take forever for a SBux even to come to Rkfd in the first place, there are now four or five branches. And there’s been a steady increase in the number of independent coffee places–they’ve been multiplying rather than being wiped out. Now, if only Walmart hadn’t wiped out the local bakeries…it would be nice to see whether an independent bakery trend could start if we planted a Krispy Kreme or Entemann’s seed?

  2. P.S. I also appreciate that SBux makes a concerted effort to take good care of its “partners” (employees/associates) benefits-wise, something that independent coffeehouses (for all their charms) are usually still unable to handle, simply because they are too small.

  3. My wife worked at “the Buck”, as she affectionately called it, for about a year. The really did treat her like a “partner” she got a great salary for food service employment, she got a 15% discount, she had options to put money into the corporation, and she got free coffee a week (about 5 dollars worth). Also even though she worked part-time she was eligible to insurance, but not only for her, for me as well.

    I was really set back when I learned all of this. It allowed me to have some hope in “Big Business”.

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