17 April 2006

Is Starbucks Coffee going cold in Australia?

Intending to prepare for a class I will be teaching later this year (my Brand and Product Management course includes Professor Kevin Keller's Starbucks case), I visited the Starbucks Australia website today (17 April). The site gives every appearance of not having been updated since December 2004: the last entry on the "Press Room" page is about the (global) Corporation's response to the Asian tsunami disaster.

How is Starbucks doing in Australia? Where is it heading? How many stores does it now have? Is it changing its business model from 100% company-owned stores to a franchise operation (like its apparently more successful competitor, Gloria Jean's)? What is its current approach to store location after it made some poor initial choices, like its now-closed store in Toorak Road, South Yarra?

Latest information on the Starbucks Australia site says it has 50 stores "to date". This was the figure it gave as its initial target when it launched here in 2000 (see this press story from 2004), but one suspects that this is well out of date. No info that would help answer any of my other questions, either.

By comparison, the Gloria Jean's Coffees website lists 51 stores in Victoria alone, and the latest item in the "Media Centre" is dated 10 April 2006, i.e. just last week. Interesting, too, that Gloria Jean's is apparently making a go of its store at Borders Skygarden in Sydney... one of the very locations where Starbucks closed down in 2004 (see the press story cited above).

On any reckoning, Starbucks has failed to take Australia by storm the way it did the United States. Of course, in the US it "created" a mass-market coffee culture where none had previously existed, and where feeble filtered brews were the dominant offering even in decent restaurants. And while I would be the last to suggest that you should judge a business by its website alone (the web is a great leveller), its lack of web presence certainly supports the impression that things at Starbucks ain't so Grande (pronounced "grahn-day").

PS. For those who are curious, QBrand's daily coffee needs are met by our neighbour Tony Romanella at Caffe di Lusso, 818 Glenferrie Road, Hawthorn, recently named in RACV's RoyalAuto magazine as one of the 10 best places to get a coffee in Melbourne. But it's never just about the coffee is it? At di Lusso, Tony's personality and empathic service orientation, the atmosphere and the fellow customers (e.g. from the odd Collingwood AFL star and Jellis Craig real estate agents to MLC mums) all contribute to a unique service experience.

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