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Imagine a business traveler based in Seattle with a huge client in New York City. Needing to make a visit to the client’s site, our traveler stops by a Starbucks on the way to the airport. The flight is a long one, so upon landing, this traveler also asks the taxi driver to stop at the Starbucks down the street from the hotel. Whereas today, the two stores might look somewhat similar, Starbucks’ latest expansion plan could mean that our weary traveler soon will have two very different retail experiences on the different coasts.

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In Seattle, Starbucks has announced it will open its first reserve roastery in the Capitol Hill neighborhood. The large, 15,000 square foot location will combine both operational and retail elements. That is, it will perform the actual roasting of coffee beans for its reserve blends but also feature a café and tasting room where coffee aficionados can sip, smell, and compare different offerings. A retail store on site also will encourage sales of particular blends and proprietary coffees, including some unique reserve blends that will sell for up to $50 for an eight-ounce bag.

Although Seattle will be the site of the first of these “super premium” stores, Starbucks hopes to open approximately 100 more nationwide, in cities that appear likely to support such high-end offerings.

That might include New York eventually, but in the immediate term, Starbucks instead is introducing its new express model there. The tiny stores will feature limited menus of both food and beverages and emphasize convenience, by allowing coffee drinkers to pop in and out quickly and easily, coffee in hand. In addition to their limited offerings, the express stores will rely on digital ordering and mobile payment facilities to further increase efficiency.

These dual but contrasting extensions both appear to represent responses to some of Starbucks’ competitors: Blue Bottle Coffee and Intelligentsia on the high end, Dunkin’ Donuts and Chick-fil-A on the convenience end.

Source:

Lisa Baertlein, “Starbucks Plans New Store Designs—Upscale in Seattle, Speedy in New York,” Yahoo Finance, September 6, 2014, http://finance.yahoo.com.

Discussion Question

Assuming both store models prove popular, how can Starbucks determine where to locate each type as it expands their presence through the United States?