Starbucks Hides Its Name In New Stores

NEW YORK — Starbucks Corp. said Thursday it is wiping its name from one of its Seattle-area stores and adding alcohol to the menu.

The Seattle-based gourmet coffee chain said it is changing the name of one of its existing stores in its hometown to a name that reflects the neighborhood location. The store will be called 15th Avenue Coffee and Tea. It will open next week and will serve coffee and tea as well as wine and beer.

The company said it will then open two more Seattle-area stores without the Starbucks name in locations that aren't currently Starbucks stores.

The chain said if the rethought coffee shop is a success it will consider replicating it in other cities.

"It's interesting," said Morningstar analyst R.J. Hottovy, "especially since the Starbucks brand has been such an integral part of their success."

Hottovy said he thinks the Starbucks brand still "resonates" with those who drink coffee regularly. But, he added, with the recession now in its second year, the brand may be struggling more because it is considered "premium," and therefore expensive, by consumers.

The company has been unable in recent months to keep its sales growing as more consumers cut out small luxuries to save money. Starbucks is slated to report its fiscal third quarter financial results on Tuesday and analysts have largely predicted another same-store sales decline, particularly, in particular, that competition with lower-priced rivals like McDonald's Corp. has heated up.

McDonald's has been rolling out its own line of espresso-based drinks to all of its 14,000 U.S. locations and has been heavily promoting the beverages.

Andrew Hetzel, the founder of coffee consulting group Cafemakers, said Starbucks may also be renaming its stores to provide a testing ground for changes and, possibly, to bring in a new brand of consumer.

"It looks to me that they are testing a specialty sub-brand to see if they can capture some other segment of the market that would otherwise be disillusioned by a large corporate chain," Hetzel said, adding that opening only one at first "gives them a live shop to test changes in menu offerings, store design and, perhaps, procedures quickly" without disrupting operating stores branded with the Starbucks name.

Comments

[jimk1]

I have to admit that I was not aware of their "new strategy." But it sort of makes sense. At this particular time - with the economy being what it is - to many people Starbucks has become pretentious. The appearance of, "We're just one of your neighbors who has a small local business." might just work.

But personally - I won't pay $4.00+ for a cup of coffee.

[Mike Barden]

here's my question:

are they still gonna charge alot?

[karen1p]

I thought they were already doing this.

If you go into the mid-west, they have a coffee chain named "Caribou Coffee." Looks exactly like Starbucks does....right down to the same offerings of Lemon Pound cake. I could swear that it is a Starbucks store.

[tomasedison]

The Coffee King is dead - this is the start of the downkill portion of the story.

[kellygrrrl]

those employees better start negotiating a raise now

[youtubeit]

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good articles: http://www.iamned.com

[oakley9]

Great. I can see it now. A bunch of drunk people sitting around with their laptops and cellphones.

[nvr2late]

My take is that McDonald's add of specialty coffee drinks has and will continue to impact Starbuck's bottom line. BUT, greed does have a way of showing its ugly face at some point.

[cutesky]

Wait a minute...what happened to Sarah Palin????? did I end up in some alternate universe??­??Starbuck­s, coffee, beer...where's the Sarah Palin story? I need my Palin fix!!

[Troyxx]

He, he! Very droll, old boy!
Unfortunately, we need to keep tabs on her because we do not want that dummy anywhere near the WH. One dummy was sufficient. In fact, as we well know, he did irreparable harm to America. I truly believe that from now on IQ tests should be requ'd for ALL gov't posts. We have to keep the dummies in line.

[tattuchu]

Um...my comments aren't going through and I've no idea why. No idea what I might be saying that's raising red flags. Let me try again, and make it as innocuous as possible...

I wonder what kind of beer Starbucks will serve at their shops? Will they brew it themselves? Or will it be made under license? If it'll made by someone else, I wonder who?

[pencilpusher]

Great! Starbucks will be offering burnt beer and wine. Not sure how they will accomplish it, but they did with coffee and the rest is history.

Hard to beat a "senior" coffee with two little hot apple pies for about $1.70 at McD's. Not too thrilled with the smell of hot oil and burning animal flesh in the store, but I get the coffee to go.

[Waltzing Mouse]

Speaking of which, the Washington Alcohol and Liquor Control Board has pretty strict policies regarding businesses that serve alcohol. For example, no one, not even infants can be in a business that serves beer and alcohol unless there is a definite and clearly marked divider between the bar and the business. If you are under 21 how are you supposed to order your coffee from your barista if you are standing in the same line where someone is ordering a glass of red wine or a porter? Technically you cannot. AND technically no one under 21 can work in this environment, due to the potential handling of open beer and wine. Also, I have to assume this means that people over 21 cannot sit next to a person under 21 and drink beer or wine.

Does this mean that the 15th Avenue Cafe is going to be sit down and table service? I am curious to see how and if this business plan actually works. The only people I can imagine going to this cafe will be the same people who went when it was starbucks and those visitors of women in the maternity ward of Virginia Mason Hospital half a block away.

[Waltzing Mouse]

I live and work 4 blocks away from this location. I've walked by it every morning for the past 9 years. One a 1 1/2 block strip there are 5 Cafes, 1 Tea cafe, and 5 bars/pubs. Every one of these businesses, except Starbucks is a small business with anywhere from one to five stores throughout Seattle.

Personally, I find their idea of changing their name specious. Seattle-ites who don't support Starbucks Corporation have their reasons. The two I hear most commonly are 1. Starbucks coffee always tastes burnt, and 2. I prefer to support the smaller local roasters and cafe's.

I believe that potential customers who are being mislead into thinking that they are supporting a small, or neighborhood business when, in fact, they are supporting a giant corporation is repellent. The coffee is a starbucks product, the food served will be starbucks products, the quality of service will be a starbucks product, the expectation of the employees skill and attitude will be at starbucks product. Changing the name is nothing more than a lie.

Beer and wine? just walk next door to 'Smith' – an oftentime overflowing bar/tavern­/restauran­t. People who want to drink alcohol don't necessarily want to drink it around children. Being in starbucks, I mean 15th Avenue Cafe, does not prevent this from happening.

[Sarah Moore]

People who have a problem with Starbucks coffee and Starbucks service and Starbucks food, etc., will soon find that they don't like the 15th Ave Cafe and won't go back- the name won't make a difference, especially with all of those other options to choose from. And people who like "burnt" coffee and don't care who they're supporting when they buy it now have a place to get it.

I guess what I'm saying is that if Starbucks is so distinctive in all that it does (and apparently all that it does is negative to you), then changing the name should make little or no difference in who chooses to go there.

[AmandaRuth]

2 more reasons Seattle-ites don't (or shouldn't) support Starbucks -
l SuperSonics
2 heartless way long term (15 to 20 years) employees were treated during layoffs at corporate head quarters last year...Seattle natives who sacrificed family to work 50-60 hours a week building the brand, only to see their jobs outsourced or replaced with non benefited contract labor, or replaced by people with much less seniority and the lower salary/benefits to match. Most of these people would have been happy to work with the company to reduce operational expense, even if that meant taking a lower paid job in the company. Many of these people have not found replacement work (there are no jobs). Imagine working your whole life devoted to a company who tosses you out like trash, only to lose everything, and i mean everything a year or two later. Oh, and almost all of the management team that supported every bad decision that Sbux made leading to its decline is still there. The employees who did the work, not so much.

[PresidentRobertBooth]

If I had the start up capital....and the legal framework to operate within, I'd make a fortune opening Dutch-style "coffee" houses across the United States.


But sadly....lawmakers refuse to allow me to be business-minded and provide jobs for decent Americans.

[noweknow]

Starbucks will staff their stores with mermaids wearing only fishnet stockings. Much hotter than Hooters.