We’ve been talking a lot lately about the crazy extremes burger-and-dog joints are going to, to stay competitive these days. Now, Starbucks is trying to invade the happy hour market by serving beer and wine in a growing number of its U.S. outlets. What’s behind this seemingly odd decision?
The Coffee shop segment of the fast-service restaurant niche is getting pretty crowded. For every new Starbucks that opens, a competitor – in Canada, usually The Second Cup – opens across the street or down the block soon after. Here in Canada, there is also the looming spectre of the ubiquitous Tim Horton’s doughnut shops, whose coffee is a national treasure (some say) and whose provenance goes back fifty solid years. And let’s not forget McDonalds push in the past couple of years to improve their coffee. I’ve heard a number of folks say they’ve switched to McD’s coffee from Tim’s. That would have been unheard of a few years ago.
In short, the caffeine business is getting a case of the jitters.
But there may be more to the story…
We live in an age where ‘increasing shareholder return’ trumps all other corporate considerations. If Starbucks’ profits are stagnating or even dropping off, it’s no surprise they would look for new ways to make money.
With its firmly established image as a high-end beverage purveyor, adding a wine bar just makes marketing sense. But can Starbucks successfully invade the territory of established pubs and restaurants which, until now, have not been in competition with them? We’ll see.
However… Other operations have suffered for the sin of blurring their successful established public images. The old, unbreakable rule is, “Don’t mess with success!“
Can Starbucks get away with it? We’ll see…
~ Maggie J.