You wonder why Star Bucks is struggling?

December 1st, 2008

Visit a Star Bucks in Auckland and you will get some insight.

And you get American Christmas Carols, a warm atmosphere and range of special christmas coffees.

It’s like you’ve stepped into a different world.

New Zealand isn’t the states, it’s not cold here, it’s coming into summer.

How about some local kiwi drinks? with a kiwi feel?

Star Bucks ignorance to adapt to the local market speaks loudly….

Even McDonalds has realised that Kiwi’s appreciate the effort. I suspect its the same in other countries, have you been to Star Bucks overseas, what did you think?

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14 Responses to “You wonder why Star Bucks is struggling?”

  1. Vera Says:

    I think you’re exactly right (about Starbucks and about McDonalds).

    Starbucks opened its doors in Portugal for the first time about a month ago. I haven’t had the chance to go there yet (but I’ll be flying to Lisbon in 15 days…w00t!) but I have a feeling that, if it’s just the same as it is here or in the US (or in the UK, which is the only other country where I’ve been to Starbucks), it won’t last.

    Portugal has a very strong coffee culture. The “bica” – a short and strong expresso – is something that most Portuguese drink more than once a day, every day. It costs about $1 each. I can’t see Portuguese coffee lovers switching from their “bicas” to a NZ$4 coffee that doesn’t even taste good…

    Maybe I’m wrong but, IMHO, if someone becomes a starbucks customer in Portugal, it will probably be purely out of fashion, because, for some people, if they do it in the US, then it’s fashionable and we should all do it too…

  2. paul Says:

    Could just be the Coffee is crap….

  3. Ben Young Says:

    I remember going in Santiago and Lima, was full of travelers, same reason as McDonalds as has that familiarity that reminds you of home, but they were the same as in NZ.

    @Paul we both know people don’t go to Star Bucks for the coffee haha

  4. Ben Kepes Says:

    @paul – no way is it as simple as that…. actually this deserves a post of it’s own. One coming up over on div – thanks for the prompt bwagy

  5. Ben Young Says:

    @Ben No worries, make sure you do a trackback here ๐Ÿ™‚ I look forward to it.

  6. paul Says:

    @ben I wrote something about this. Value being multifaceted…

  7. My Thoughts on Coffee at Says:

    […] post over on bwagy’s blog got me thinking about coffee. Ben asked why people think that Starbucks […]

  8. Ben Kepes Says:

  9. Ben Young Says:

    Nice one Ben ๐Ÿ™‚

  10. sam Says:

    Starbucks is aiming for the tourist, so they can get the same taste where ever they are in the world- like MacDonalds. It caters for the un adventourous traveller who cannot venture out of their comfort zone and try something else.

    I think it is all about taste, if you like the commercial, highly flavoured ( mint/toffee/caramel etc) coffee then Starbucks is for you, but if you prefer a more natural taste of coffee then you will go to the places like C4.
    But then I find their coffee can be bitter, I prefer a more gentle tasting coffee.
    I wont touch instant.
    There is a little caravan in Cathederal square that makes the best coffee in ChCh, I like it with sugar and milk( they put the sugar in first) my partner likes it black and strong. They do it to suit us both.
    So it is a matter of taste and what you are used to.

  11. My take on Starbucks’ struggle | PocketSmith Says:

    […] of very interesting posts made by Ben Young (You wonder why Star Bucks is struggling) and Ben Kepes (My Thoughts on Coffee) on Starbucks in the New Zealand market, regarding their lack […]

  12. James Says:

    Thought I would throw in my two cents ๐Ÿ™‚

    Also check out this Financial Confession I reference in the post – says it all really!

    Thanks for bringing this up, fascinating topic, with Starbucks being a relatively new entrant into New Zealand (compared to say, McD’s or other fast food chains).

  13. Hamish Says:

    Disclaimer: I don’t drink starbucks coffee, nor do I work there,
    but I happen to know a bit about the companies operations in NZ.

    Is it struggling in NZ?

    Their profit is down this year – hardly surprising given the economic end-of-times we’re (supposedly) experiencing – but same store sales are still up for the year. In fact, they’ve never had a year of decreased sales since they’ve been in NZ.

    The reason they do well is the same reason that McDonalds did well in the first place: consistency.

    Consistency is the mantra of fast-food. It’s the same reason that Starbucks, particularly in central Auckland, will be *packed* with foreigners have an expensive coffee. It’s why McDonalds could expand so rapidly when they first arrived.

    Remember that Starbucks is not aimed at the coffee-snob. It’s aimed at the 90% of the market who want [the perception of] upmarket coffee, but don’t have the inclination to search it out. It’s like pop music… it *blows*, but it makes lots of money.

    McDonalds is slightly different for two reasons:

    1. They’re established

    They’ve been here a while, they’re saturated, they can’t play the margin game any more. They have to differentiate and one way is to be kiwi. Starbucks is not so established and does not need to try to pick up the relatively small gains offered by localised product.

    2. NZ is seen as an ‘experimental’ market

    For McDonalds, New Zealand is seen as an ideal market to experiment. That’s why McCafe started here. A lot of concepts are trialed here as a small, relatively low cost market with similarities to the US.

    Starbucks don’t – the NZ operation is run by the NZ based franchise holder Restaurant Brands, and there is no pressure to use the NZ company as an ‘ideas lab’.

  14. sam Says:

    nicely said Hamish- my point exactly

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