The AP just published an article on one of the great paradoxes of business today, which is that Seattle continues to be a mecca of small coffee houses even though the Goliath of the industry, Starbucks, is based there. "As other towns worry that Starbucks Corp. will run their local favorites out of business and rob their streets of quirky charm, the owners of several of Seattle's most beloved independent coffee houses say they have found success by going the opposite route of their big competitor -- making a selling point of being small," the AP reports.
Many of the entrepreneurs who talked to the AP credit Starbucks with making $3 the standard price for a cup of coffee, which let them to raise prices, too. The small businesses also benefit from the corporate chain's ubiquity in terms of branding. One small business owner interviewed said that it was easier to be the Porsche of the indsutry when there's a Ford around with whom customers can compare you.
"For some of Seattle's independent proprietors," the AP continues, "the decision to keep things at a smaller scale is in part about quality of life. Dow Lucurell wakes up at 4:30 a.m. and gets his first latte of the day at the Uptown Espresso in Queen Anne, before embarking on a 12- to 14-hour day that will often take him to each of the seven Uptown locations he owns in Seattle.
"The hours may seem long, but Lucurell says he knows the names of all 63 of his employees and has a job that allows him to have long lunches with his buddies or coffee with his parents. It's a life he says he wouldn't be able to maintain if he were running a bigger coffee chain or trying to answer to shareholders, like Starbucks does."
Still, the article ends with Lucarell making an interesting point. To date, Starbucks has only known constant and continual revenue growth. Should the company's prospects take a turn, he theorizes, Starbucks could be a much tougher competitor, using its enormous buying buyer and marketing clout in ways that would make life much more difficult for its quaint little rivals.
'When their golden era is over, that's when they start to pressure,' he told the AP.