Urban Jacksonville

Future Starbucks location at Main and Forsyth in Downtown Jacksonville

Second Downtown Jacksonville Starbucks at Main and Forsyth

Starbucks is opening its second location in Downtown Jacksonville. I can hear some people groaning and other people cheering. In spite of how you feel about this new downtown development here’s a few things I want to point out about the second coming of Starbucks:

Creation of a third place
Creates the appearance of progress
The downside of Starbucks

The third place
The Third Place is a term used in the concept of community building to refer to social surroundings separate from the two usual social environments of home and the workplace. While Starbucks actually uses this term in its marketing literature the fact can’t be denied, people love to congregate and hang out in these places. I know Panera, another popular third place, has increasingly been a place for people to meet and hangout, not just eat.

We need more of these third places in downtown to encourage people to linger before and after work and on the weekends. Note to new businesses opening in the downtown area: want to be a popular destination? Provide free Wi-Fi.

Creates the appearance of progress
To some people Starbucks is the scourge of all mankind. Predatory business practices, unfair trade agreements and burnt-tasting coffee can leave a bad taste in your mouth. To others Starbucks is seen as a beacon, something familiar in an unfamiliar land. Someone thinking about moving downtown might see Starbucks as a place they can relate to.

Everything about New Age chains like Starbucks is designed to assure us that they are a different breed from the strip-mall franchises of yesterday. This isn’t dreck for the masses, it’s intelligent furniture, it’s cosmetics as political activism, it’s the bookstore as an old-world library, it’s the coffee shop that wants to stare deep into your eyes and connect. (source)

To businesses, Starbucks is proof that the area is a viable place. The area has reached the tipping point or will reach it soon. Right now I think Downtown Jacksonville is at the tipping point. With more residents, City Market and 122 Ocean and other projects coming online, the next 12 months are going to be very exciting.

The downside of Starbucks
If I didn’t point out the downside to the arrival of a second Starbucks in downtown Jacksonville I’m sure about ten different comments would. These points are taken from an excerpt of Naomi Klein’s landmark book No Logo. It describes Starbucks’ predatory business practice of clustering:

Instead of opening a few stores in every city in the world, or even in North America, Starbucks waits until it can blitz an entire area and spread, to quote Globe and Mail columnist John Barber, like head lice through a kindergarten. It’s a highly aggressive strategy, and it involves something the company calls cannibalization. The idea is to saturate an area with stores until the coffee competition is so fierce that sales drop even in individual Starbucks outlets.

It also helped Starbucks, no doubt, that its cannibalization strategy preys not only on other Starbucks outlets but equally on its real competitors, independently run coffee shops and restaurants. And, unlike Starbucks, these lone businesses can only profit from one store at a time. The bottom line is that clustering, like big-boxing, is a competitive retail strategy that is only an option for a large chain that can afford to take a beating on individual store in order to reap a larger, long-term branding goal. It also explains why critics usually claim that companies like Starbucks’ are preying on small businesses, while the chains themselves deny it, admitting only that they are expanding and creating new markets for their products. Both are true, but the chains’ aggressive strategy of market expansion has the added bonus of simultaneously taking out competitors.

Read the entire excerpt here: Clustering: The Starbucks Model

If anyone wants to write a post detailing the negative impact a second Starbucks location might have on downtown I would be happy to post it.

tags: jacksonville, starbucks

This entry was posted on Sunday, April 1st, 2007 at 9:31 pm and is filed under Downtown Jacksonville. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

Austin Cassidy

What exactly are the costs you're referencing?
Holly

As someone recently liberated from living within walking distance of the twin Starbucks across the street from each other (in Houston) made famous by Lewis Black's comedy monologue, I feel compelled to offer a general invitation to Jacksonville to please, please be mindful of how the urban development evolves.

Driving around I can feel/visualize how Jacksonville's space and spread could easily become a Houston-like cobble of concrete.

The shopping and third spaces in a city like Houston certainly can be attractive. And the perception (see this month's Continental's in-flight magazine for example) of the economic upside for this growth seems to be increasingly seductive. However, the costs -- and their layering year after year -- are no where near worth it, and extremely difficult to reverse or alter once in place.

I'm glad to back in Florida and in a smaller city (I grew up in Tampa when the city's motto was "Tampa: The Next Great City" -- really, this was the motto, I remember it in the endzones of the old Tampa Stadium during NASL games. NASL!). I'd hate to get to feeling the way I did the last few years I lived in Houston.

Towards the middle way.....
Austin Cassidy

Ok, well if not Little Ceasars then think of K-Mart. Starbucks is successful because people like going there. I don't particularly care for it, but a large percentage of the population does. Same idea... opening a bunch of K-Mart stores in Jacksonville isn't going to squash (or seriously dent) Wal-Mart or Target. Most consumers don't just go to an establishment because it's everywhere, they choose it for some reason... service, price, quality, or whatever.
David

I find that Starbucks doesn't really cater to real social development.
By it's design, it's for people to come in, get there coffee and leave within a realtively short period of time (1 hr). After-which the chairs (by there design) become uncomfortable.
David Knighton

They can put a Starbucks every 50 feet for all I care. I want my damn Venti Caramel White Chocolate Mocha!
Johnny

There used to be several Little Caesar's in NE Florida. They all closed...
Adam Beaugh

WHAT! little caesar's in greenville had a lunch special where you got a large pepperoni pizza for $5. it was the BEST!
Austin Cassidy

"These places would not survive if there was not the clientel to support them. No one makes you go into a Starbucks or McDonalds. You go there because you like the product. Convenience is also a factor."

Exactly! Consumers are the ones who decide what does and doesn't succeed in the marketplace. If you all of a sudden opened 30 Little Caesars Pizza locations in Jacksonville, I would bet you anything that 1-2 years later most of them would be closed and the existing landscape wouldn't have been altered much.
PCollins

I remember 8-track tapes.

"clunk!" ....sitting on the dock of the bay...
"clunk!".....calling, Dr Love, I'm calling Dr. Love..."
"clunk!" ............

Although I was at the END of that particular era...
Mom Marchy

For the most part I truly enjoy a trip to Starbucks. The music is never the same, and always good. They offer a selection of brews and coffee paraphanalia, music, books and a nice safe place to chill and people watch. Look how many Gate gas stations and Publix markets there are, that we all like to frequent because they are clean and have quality products. These places would not survive if there was not the clientel to support them. No one makes you go into a Starbucks or McDonalds. You go there because you like the product. Convenience is also a factor. There are plenty of mom/pop and independent operations still around. We live in an ever changing world, what's here today might well be gone tomorrow, replaced with a new and better idea. You guys probably don't remember 8-track tapes.
Clustering is not predatory

Fawn - MMMM right back at you. : )

I read the exerpts that were linked and she is making (in my opinion) an argument that "cannibalization" via multiple venues in a given market is a bad thing. I think it's a good thing. If you love Starbucks, it's better to have one down the road than across town. Ditto with Bailey's Gym, etc., as noted above. It's simply more profitable and efficient to have ten stores in Jacksonville than have one in Jax, one in Daytona, one in Gainesville, one in Tallahassee, and so on.

Economies of scale, more often than not, be it big boxes, Starbucks, etc., tend to impart business advantages that are rewarding to shareholders (and I would also argue, for consumers too). That's a law of economics that we'll all have to deal with FOREVER.

And sometimes that's going to mean a competitor opening up a store right down the street from yours. Again, welcome to free enterprise. Now buying out a lease under a competitor - like mentioned in the No Logo exerpt - that's pretty cutthroat, but legal. Business, and especially entrepreneurship, is tough! Ain't for the faint of heart or risk averse...
skimbro

The big boxes can't be beat on price. And they can't be beat on volume. But that doesn't mean that an independent business can't survive among the boxes and franchise clusters. They just have to offer something different -- either items the boxes don't have, or quality/style that justifies a higher price-point.

As for coffee, the little guys will have a better shot once population density increases. A sliver of market share goes a long way in a big market. (Pause for reverie over the Philadelphia coffee shops I used to frequent.) I'm sure for now that Starbucks will depress independent coffee shops because there aren't enough consumers to go around. But once downtown gets more people in it, independent stores will start succeeding.
Fawn Leibowitz

I would also venture to say that at this point in time, at least in cities of Jacksonville's size, the big boxes can't be beat (as much as it honestly pains me to say that). They simply have too many advantages (getting stuff cheaper, more dollars for advertising, etc.).
Fawn Leibowitz

MMM, some would say Wal-Mart can't be beat by anyone/business with a conscience. Ask Rubbermaid.

And it greatly distorts the debate to talk about predation in terms of just opening lots of stores. I don't think Klein's book makes the argument that businesses shouldn't open multiple stores/sites. That is just a sloppy argument.
PCollins

The way to beat Wal-Mart, and other big box/saturation corporations, is to offer something that they don't. Sometimes their ponderous size works against them.

Find a freakin' niche and stop whining about it.
Clustering is not predatory

It annoys me to read authors, like Naomi Klein, discuss topics in which they have minimal expertise. Like business.

Clustering is a business strategy that attempts to build regional market share and economies of scale, allowing a business to be more efficiently run and more profitable through the operation of multiple locations in a given market.

Take a business like Bailey's Gym. It's got locations all over Jacksonville. Is this predatory? No, this is the most optimal way to run the business. You only need one regional executive to cover the city. You have the ability to leverage advertising dollars across various media, and get some purchasing power. And you're able to better able to leverage your brand.

Is Firehouse Subs predatory? Kohl's department stores? There are zillions of examples.

Folks, it's called competition. Welcome to the free enterprise system.
jd134

I would much rather see a Starbucks there, than an empty storefront. Hopefully, this will lead to more interest in the Downtown retial market.
Shaan

I agree that Starbucks is lame, however a downtown without one is worse. Starbucks has done a great job of setting a standard in the US for quality coffee. It's also done a great job of clearing out a bunch of crappy coffee stores that should have never opened, because of bad business plans and shit coffee. As a consumer, I will always go a quality Independent coffee store, provided it was cool and served a quality product before Starbucks any day. The problem is, downtown does not have a cool Independent coffee store yet. So I guess I'll hang out in Starbucks until one arrives. I heard that 11E has given them that space, rent-free for the next 5 years. Does anyone know anything about that?
DamonNoisettejavascript:void(0

All I can say is that Starbucks is incredibly lame...

Joey, it was nice seeing you & the family at Panera Bread earlier today by the way.
thelakelander

Great post. Imo, I'm just happy to see the street level space finally filled. Hopefully, this along with 122 Ocean, will spur more street level activity in the immediate area.

Is Starbucks the gateway drug to downtown development?

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