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While I can't speak to Starbucks, a similar coffee chain in Australia is actually a property play. They don't just own their cafe, but also several of the adja

While I can't speak to Starbucks, a similar coffee chain in Australia is actually a property play. They don't just own their cafe, but also several of the adjacent stores as well, which they lease out to other retailers. Much of the value in the business actually comes from appreciation in property values.

ozim 8y ago
That is actually what McDonalds is doing, burgers are just addition.
underwater 8y ago
Starbucks equivalent in Australia? The only company I can think of to fill that space would be Gloria Jeans, but they don’t have the same pull as Starbucks.
- SyneRyder 8y ago
  I'm reluctant to say which company, as I'm not sure how public that information is. It's worth pointing out Starbucks has several competitors in the cafe-chain space in Australia. There are cities in Australia where Starbucks tried opening & then closed down because they were unable to beat the local incumbent cafe chains.
  - dleclere 8y ago
    Shall we call this mysterious coffee chain Glorious Pants Coffee Company?
    - SyneRyder 8y ago
      lol :) I am a huge fan of Gloria Jeans (especially their Mudslide Mocha), but it isn't them. Gloria Jeans run on a franchise model & earn their money from selling franchising rights, collecting franchise fees, advertising fees & requiring franchisees to purchase coffee beans etc from approved suppliers that in some cases are owned by the umbrella company. I understand they're considering a shift to a company-owned store model - but they only just started a franchising arrangement in Germany, so that's a long way from happening. I suspect some Aussies haven't heard of this cafe chain, even though they have twice as many stores as Starbucks, and now have cafes internationally.
      - underwater 8y ago
        Now you’ve got me intrigued. My second guess would be the Coffee Club. Apparently, and surprisingly, they are the largest chain in Australia. Hudson’s, Gloria Jeans, Michels Patisserie all seem to follow the franchise model and stick to malls, whereas the Coffee Club is more likely to be found in a downtown location. And they are inexplicably successful given the experience is not that outstanding.
      - jhbadger 8y ago
        Gloria Jeans actually started in America (in a Chicago suburb in 1979) and were common in Illinois and Wisconsin in the early 1980s. They've pretty much died out here -- interesting to learn that they had a second life in Australia.
        SyneRyder 8y ago
        The Australian owner took it international, Gloria Jeans are apparently in 55 countries now. It was interesting to search for Gloria Jeans on Twitter and find most of the tweets were from places like Pakistan, Malaysia, Oman, Singapore & Fiji. I'm particularly excited that Gloria Jeans is launching 40 stores in Germany soon [1], and also 13 stores in the UK next year [2]. (We don't have Starbucks in my city and I loved Gloria Jeans so much that I bought shares in the parent company, that's why I'm so interested in information about coffee shops & competitors. So far it's been the worst share investment I made though, the shares have crashed 90%!) [1] https://www.insideretail.com.au/news/gloria-jeans-to-open-40-stores-in-germany-201804 https://www.insideretail.com.au/news/gloria-jeans-to-open-40... [2] http://www.rfg.com.au/2018/05/22/gloria-jeans-coffees-open-first-190-outlets-planned-uk/ http://www.rfg.com.au/2018/05/22/gloria-jeans-coffees-open-f...
  - fermienrico 8y ago
    If it’s “Established” chain, I don’t understand your reasoning for not mentioning the business name. It’s public information by the virtue that it’s a cafe, not to mention, a chain. Why the secrecy?
    - SyneRyder 8y ago
      The cafe chain is a privately held company. I'm not sure it's public information that they earn some of their income from owning & leasing nearby properties to completely unrelated retailers. I just happened to talk to someone who told me about it. But my general point was less about this specific chain, and the idea that your profits may come from a part of the business that you're not known for. You then use that money to subsidize the other parts of the business. A bit like how Sony Corporation's profits come from life insurance & medical insurance, while their electronics division makes a loss. [1] https://www.nytimes.com/2013/05/28/business/global/sonys-bread-and-butter-its-not-electronics.html https://www.nytimes.com/2013/05/28/business/global/sonys-bre...
      - fermienrico 8y ago
        Dude, just mentioning the name of the company isn't private. I am not sure why but I am incredibly bothered by this secrecy. There is nothing to do hide. The cafe exists in PUBLIC space for god sake! I bought a toothpaste from a store but I feel like I shouldn't disclose the name of the store for their privacy. They're a private company!
- thedataangel 8y ago
  Starbucks is next to non-existent in Australia. Partly it's because there were already established local chains when they tried to move into the market, but mostly because you can walk into almost any cafe in the country and get a much better cup of coffee at a comparable price.
  - umanwizard 8y ago
    > you can walk into almost any cafe in the country and get a much better cup of coffee at a comparable price. This is also true in the United States and yet here we are.
    - jrochkind1 8y ago
      It wasn't when Starbucks started. There used to be a real dearth of quality prepared coffee in America, and Starbucks was often the first place in many towns (not talking NYC or LA or San Fran or Chicago) to get a decent cup of coffee. I don't know what to take from that though with regard to what y'all are arguing about, I can't really explain the economics of it all. But I think it's a fact that at the point Starbucks was expanding to be national, it was not true that most places it was expanding to had plenty of places where you could get a much better cup of coffee at a comparable price. Starbucks actually brought "coffee culture" to most of the U.S. (if it wasn't them it would have been someone else, this was when "foodie" culture in general was becoming a thing, people with enough money to were becoming more interested in 'gourmet' everything).
      - umanwizard 8y ago
        Well, I agree with you, but it doesn't contradict my point. The fact that now, in 2018, it's possible to easily get high-quality coffee in Australia is not a complete explanation of why Starbucks is not popular there, since the same is true of the United States.
        jrochkind1 8y ago
        Well, the argument would be that Starbucks got it's national market share when that was not true in the U.S., but does not have that opportunity now in Australia. shrug.
robocat 8y ago
I heard Starbucks is closing down in New Zealand due to lack of profit. But we have ridiculously good independent coffee shops, often run as "labours of love" or wishful thinking as per the article.
- lostlogin 8y ago
  I’d heard that too, but they are still here. I buy green beans from a big supplier here and it’s interesting to chat to them. New Zealand imports good beans and very little low grade coffee comes into the country. Presumably the likes of Starbucks aren’t included in this statement as they import their own.

ozim 8y ago

That is actually what McDonalds is doing, burgers are just addition.

underwater 8y ago

Starbucks equivalent in Australia? The only company I can think of to fill that space would be Gloria Jeans, but they don’t have the same pull as Starbucks.

SyneRyder 8y ago
I'm reluctant to say which company, as I'm not sure how public that information is. It's worth pointing out Starbucks has several competitors in the cafe-chain space in Australia. There are cities in Australia where Starbucks tried opening & then closed down because they were unable to beat the local incumbent cafe chains.
- dleclere 8y ago
  Shall we call this mysterious coffee chain Glorious Pants Coffee Company?
  - SyneRyder 8y ago
    lol :) I am a huge fan of Gloria Jeans (especially their Mudslide Mocha), but it isn't them. Gloria Jeans run on a franchise model & earn their money from selling franchising rights, collecting franchise fees, advertising fees & requiring franchisees to purchase coffee beans etc from approved suppliers that in some cases are owned by the umbrella company. I understand they're considering a shift to a company-owned store model - but they only just started a franchising arrangement in Germany, so that's a long way from happening. I suspect some Aussies haven't heard of this cafe chain, even though they have twice as many stores as Starbucks, and now have cafes internationally.
    - underwater 8y ago
      Now you’ve got me intrigued. My second guess would be the Coffee Club. Apparently, and surprisingly, they are the largest chain in Australia. Hudson’s, Gloria Jeans, Michels Patisserie all seem to follow the franchise model and stick to malls, whereas the Coffee Club is more likely to be found in a downtown location. And they are inexplicably successful given the experience is not that outstanding.
    - jhbadger 8y ago
      Gloria Jeans actually started in America (in a Chicago suburb in 1979) and were common in Illinois and Wisconsin in the early 1980s. They've pretty much died out here -- interesting to learn that they had a second life in Australia.
      - SyneRyder 8y ago
        The Australian owner took it international, Gloria Jeans are apparently in 55 countries now. It was interesting to search for Gloria Jeans on Twitter and find most of the tweets were from places like Pakistan, Malaysia, Oman, Singapore & Fiji. I'm particularly excited that Gloria Jeans is launching 40 stores in Germany soon [1], and also 13 stores in the UK next year [2]. (We don't have Starbucks in my city and I loved Gloria Jeans so much that I bought shares in the parent company, that's why I'm so interested in information about coffee shops & competitors. So far it's been the worst share investment I made though, the shares have crashed 90%!) [1] https://www.insideretail.com.au/news/gloria-jeans-to-open-40-stores-in-germany-201804 https://www.insideretail.com.au/news/gloria-jeans-to-open-40... [2] http://www.rfg.com.au/2018/05/22/gloria-jeans-coffees-open-first-190-outlets-planned-uk/ http://www.rfg.com.au/2018/05/22/gloria-jeans-coffees-open-f...
- fermienrico 8y ago
  If it’s “Established” chain, I don’t understand your reasoning for not mentioning the business name. It’s public information by the virtue that it’s a cafe, not to mention, a chain. Why the secrecy?
  - SyneRyder 8y ago
    The cafe chain is a privately held company. I'm not sure it's public information that they earn some of their income from owning & leasing nearby properties to completely unrelated retailers. I just happened to talk to someone who told me about it. But my general point was less about this specific chain, and the idea that your profits may come from a part of the business that you're not known for. You then use that money to subsidize the other parts of the business. A bit like how Sony Corporation's profits come from life insurance & medical insurance, while their electronics division makes a loss. [1] https://www.nytimes.com/2013/05/28/business/global/sonys-bread-and-butter-its-not-electronics.html https://www.nytimes.com/2013/05/28/business/global/sonys-bre...
    - fermienrico 8y ago
      Dude, just mentioning the name of the company isn't private. I am not sure why but I am incredibly bothered by this secrecy. There is nothing to do hide. The cafe exists in PUBLIC space for god sake! I bought a toothpaste from a store but I feel like I shouldn't disclose the name of the store for their privacy. They're a private company!
thedataangel 8y ago
Starbucks is next to non-existent in Australia. Partly it's because there were already established local chains when they tried to move into the market, but mostly because you can walk into almost any cafe in the country and get a much better cup of coffee at a comparable price.
- umanwizard 8y ago
  > you can walk into almost any cafe in the country and get a much better cup of coffee at a comparable price. This is also true in the United States and yet here we are.
  - jrochkind1 8y ago
    It wasn't when Starbucks started. There used to be a real dearth of quality prepared coffee in America, and Starbucks was often the first place in many towns (not talking NYC or LA or San Fran or Chicago) to get a decent cup of coffee. I don't know what to take from that though with regard to what y'all are arguing about, I can't really explain the economics of it all. But I think it's a fact that at the point Starbucks was expanding to be national, it was not true that most places it was expanding to had plenty of places where you could get a much better cup of coffee at a comparable price. Starbucks actually brought "coffee culture" to most of the U.S. (if it wasn't them it would have been someone else, this was when "foodie" culture in general was becoming a thing, people with enough money to were becoming more interested in 'gourmet' everything).
    - umanwizard 8y ago
      Well, I agree with you, but it doesn't contradict my point. The fact that now, in 2018, it's possible to easily get high-quality coffee in Australia is not a complete explanation of why Starbucks is not popular there, since the same is true of the United States.
      - jrochkind1 8y ago
        Well, the argument would be that Starbucks got it's national market share when that was not true in the U.S., but does not have that opportunity now in Australia. shrug.

robocat 8y ago

I heard Starbucks is closing down in New Zealand due to lack of profit. But we have ridiculously good independent coffee shops, often run as "labours of love" or wishful thinking as per the article.

lostlogin 8y ago
I’d heard that too, but they are still here. I buy green beans from a big supplier here and it’s interesting to chat to them. New Zealand imports good beans and very little low grade coffee comes into the country. Presumably the likes of Starbucks aren’t included in this statement as they import their own.