Starbucks Is Good for Mom and Pop

28 December 2007 at 4:34 pm Leave a comment

| Peter Klein |

The WSJ ran a piece a few years back showing that independently owned coffeehouses do better after Starbucks moved to town. Taylor Clark (of Starbucked fame) provides similar figures in today’s Slate:

In its predatory store placement strategy, Starbucks has been about as lethal a killer as a fluffy bunny rabbit. . . . According to recent figures from the Specialty Coffee Association of America, 57 percent of the nation’s coffeehouses are still mom and pops. Just over the five-year period from 2000 to 2005 — long after Starbucks supposedly obliterated indie cafes — the number of mom and pops grew 40 percent, from 9,800 to nearly 14,000 coffeehouses. (Starbucks, I might add, tripled in size over that same time period. Good times all around.)

The theory is that Starbucks’s rapid growth (maybe not this rapid) has boosted the demand among US consumers for premium coffee, a demand that Starbucks alone cannot satisfy. Three cheers for positive spillovers! (Greg Mankiw, how about Pigouvian subsidies for poor old Howard Schultz?)

Entry filed under: - Klein -, Ephemera.

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