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Stacy Mitchell: Starbucks Goes Stealth with Unbranded, "Local" Cafes

Stacy Mitchell is the author of Big-Box Swindle: The True Cost of Mega-Retailers and the Fight for America's Independent Businesses. A senior researcher with the Institute for Local Self-Reliance, she chairs the American Independent Business Alliance, Mitchell regularly contributes articles and commentaries to magazines and newspapers, and produces an acclaimed monthly email newsletter, The Hometown Advantage Bulletin. This post originally appeared a the ILSR's New Rules Project blog.

Book Cover for Big-Box SwindleIn one of the more brazen attempts by a corporation to disguise itself as a locally owned business, Starbucks is un-branding at least three of it Seattle outlets.

The first of these conversions, reopening this week after extensive remodeling, will be called 15th Avenue Coffee and Tea. All of the signage and product labels will bear this new name. The Starbucks corporate logo will be no where to be seen.

In an interview with the Seattle Post-Intelligencer, Starbucks spokeswoman Anna Kim-Williams described the company's intent:

We're continuing our commitment to delivering specialty coffee excellence while refreshing our store design approach with amplified focus on local relevance... Ultimately, we hope customers will feel an enhanced sense of community and a deeper connection to our coffee heritage.

This is the latest, and arguably most audacious, in a string of corporate attempts to imitate and co-opt local-ness (see a recent investigation at New Rules Project: The Corporate Co-Opt of Local).

Starbucks learned how to act like a locally owned, neighborhood café by studying several independent coffeehouses in Seattle. One was Seattle Coffee Works, a small, 300-square-foot café. On the café's blog, co-owner Sebastian Simsch writes:

Last winter, three separate delegations of Starbucks folks came by. Each time they filled our little store so that no one else could fit in. Usually they didn’t introduce themselves, and one delegation even lied, saying they were just a group of Japanese tourists. They didn’t buy a single drink.

Starbucks people also logged many hours at Victrola Coffee Roasters. "They spent the last 12 months in our store with these obnoxious folders that said, 'Observation,'" owner Dan Ollis told the Seattle Times.

In the most obvious rip-off of an independent business, the décor of the new 15th Avenue Coffee and Tea, which the Seattle Times describes as a "rustic, eco-friendly style," is virtually identical to that of Smith, a successful bar next door. Owner Linda Derschang says Starbucks copied everything, from her vintage industrial light fixtures to her wooden seats, and even asked one of her managers where the bar's awnings came from. In an interview with the Seattle Post-Intelligencer, she noted:

It's got a lot of salvaged wood, it's the same paint color inside as Smith and some of the wood framed chalkboards look very, very similar… Where's the independent spirit in knocking someone off?

Starbucks plans to convert at least three of its Seattle outlets to uniquely named neighborhood coffeehouses. If the experiment proves successful, the approach will be extended to more of the chain's 16,000 outlets.

Starbucks has struggled over the last year. Some 600 outlets have been shuttered in a bid to cut costs. Yesterday, Starbucks reported that same-store sales were down 5 percent in the last quarter, after declines of 8 and 9 percent in the previous two quarters.


The Stranger: Starbucks/15th Avenue Coffee and Tea: The Protesters

15th Avenue Coffee & Tea Flickr set