Some coffee fans get grim delight in Starbucks woes

NEW YORK Mon Jul 7, 2008 4:40pm EDT

People walk past a Starbucks store in New York July 3, 2008. REUTERS/Chip East

People walk past a Starbucks store in New York July 3, 2008.

Credit: Reuters/Chip East

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NEW YORK (Reuters) - One coffee drinker's bad news is another coffee drinker's good news, it seems.

Financial woes at Starbucks Corp., which is planning to close 600 underperforming U.S. stores, is evoking glee and little sympathy from aficionados who say they resent the coffee shop giant and favor small independent cafes.

"I'm so happy. I'm so not a Starbucks person," said Melinda Vigliotti, sipping iced coffee at the Irving Farm Coffee House in New York. "I believe in supporting small businesses. Starbucks, bye-bye."

"Amen," chimed in Keith DiLauro, a local caterer. "They went too big, too fast."

Seattle-based Starbucks burst onto the national scene in the 1990s and grew to more than 6,000 locations around the world. But with cups of coffee that can cost several dollars, it faces a slowing economy and slowed consumer spending.

"Starbucks has really created a coffee culture, raising awareness of good coffee, which is good for independents," said Carol Watson, owner of the Milk and Honey coffee shop in Chicago. "But on the other hand, they're on practically every corner, and that makes it tough on the little guy too."

In Birmingham, Alabama, retiree Peggy Bonfield, drinking coffee at the Crestwood Coffee Shop, said: "When a Starbucks closes, it makes room for a local business to start.

"I consider that good news," she said.

The schadenfreude of coffee drinkers drawing satisfaction from another's misfortune is part of the popular culture that enjoys the downfall of companies or celebrities, said Jim Carroll, a Canadian-based trends and innovation expert.

"There are a lot of people out there who take delight in seeing an icon torn down by the masses," he said.

Starbucks fell victim to a rapid change in attitude, fueled by Internet bloggers complaining endlessly about everything from layoffs to its breakfast sandwiches, he said.

"Starbucks was a cool brand, and then all of a sudden it's not a cool brand," he said. "There's this new global consciousness that is out there that can suddenly shift."

CAFE CULTURE

Indeed, said Pye Parson, who hails from Seattle and works at Birmingham's Crestwood, "Once it went corporate, it wasn't Starbucks anymore."

New York Web designer Zachary Thacher, who favors Greenwich Village's cafes, said he avoids Starbucks. "They've commoditized cafe culture, which is why I don't go," he said.

The environmental movement toward buying and appreciating locally grown products has helped neighborhood cafes and hurt the myriad look-a-like Starbucks stores, said Judy Ramberg, a consumer strategist at Iconoculture, a Minneapolis-based trend research company.

The company that began as innovative is now known for consistency and convenience, she said. "To me, that's a huge step down," she said. "You've built your franchise on people who are coming in because they know exactly what they want."

Precisely, said Justin Sergi, explaining why he preferred Lux, a cafe in Phoenix serving lattes with a fern-like pattern teased from steamed milk in ceramic cups, over Starbucks.

"The people that work there are very pleasant, but the stores are devoid of any kind of real charm or personality," he said. "They push a button, and a machine does everything from grinding the beans to brewing the drink."

It's not as though Starbucks doesn't have defenders,

"It's convenient," said Anthony Castro, sitting in a Starbucks near his job at New York's Museum of Modern Art. "I know what to expect."

In Birmingham, Crestwood regular Gary Adkins said he felt Starbucks gave employees good salaries and benefits. But now Starbucks' plans call for cutting up to 12,000 full- and part-time positions.

Not everyone felt strongly. "It's just coffee," said Marc Poulin, a systems administrator at Zibetto Espresso Bar in New York. "If I was an investor, I'd care."

(Additional reporting by Tim Gaynor, Andrew Stern and Verna Gates; editing by Todd Eastham)

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