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From what I understood is that not every Starbucks needs to be profitable. Some are insanely profitable, while others are just branding and marketing places tha
by winkelwagen 8y ago
From what I understood is that not every Starbucks needs to be profitable. Some are insanely profitable, while others are just branding and marketing places that sell coffee. Of course there is a difference between not being profitable and bulking up insane losses each day, I think that is something Starbucks does well.
- UncleEntity 8y agoI've always wondered about this, there are 15 Starbucks within a 2 mile radius of where I live (just looked on google maps) and for some reason they don't seem to cannibalize each others sales enough for them to not keep building new stores, at least 3 of them have gone up within the last year or so.
- masonic 8y agoEven 17+ years ago, there were downtown intersections in both Seattle and Vancouver that had two Starbucks each on opposite corners.
- itchyouch 8y agoThey keep them going as long as they are profitable. They track a metric called “store contribution” which is the profit sent to corporate after all the store expenses. The highest volume stores are grossing about 40+k/week with contributions in the realm of 500-700k/yr from one example I know of. Moderate stores are doing around 25k/week. Stores below 10-15k/week tend to be at risk of shutting down or having the location changed. A 15k/week store can become a 30k/wk store just by getting a drive through. There is also a distinction between “community” stores and higher volume profit stores (eg by highway entrance). Community stores get to be a little less profitable but build a “second home” for those in the community to hang out at, while non-community stores bring in profit by being in a high traffic area.
- masonic 8y agoTwo SV locations that I used regularly (Alma Village in Palo Alto, Hacienda center in Sunnyvale) have closed this year alone.