You’re assuming that loitering people are a negative on the business — which is a mistake that Starbucks made as well, to their detriment.
Starbucks did what you’re suggesting to increase turnover and profit at stores — but the opposite happened: sales dramatically dropped, even though the time to serve a single customer and the average customer stay both dropped.
The issue is that Starbucks doesn’t just sell coffee — they’re a cafe. And cafes are in the business of selling thirdspace, where you create fun memories with friends and family. So when they provided a substantially worse version of that product, it sullied their brand and lowered their overall profit, because people no longer associated coffee at their chain with good times.
Similarly, the owner of a small cafe I used to work from loved the three or four regulars who would come near open and stay all morning — us being visibly chatty in the large storefront windows would draw in more of the nearby joggers than if the store was empty. We were a free living ad that getting coffee there was a fun time and popular with locals.
I think you’re ignoring a lot of ecosystem complexity with your “optimization”.
> Starbucks did what you’re suggesting to increase turnover and profit at stores — but the opposite happened: sales dramatically dropped, even though the time to serve a single customer and the average customer stay both dropped.
Can you show me where starbucks revenue dropped (besides 2020 pandemic dip)?
2021 $29,061
2020 $23,518
2019 $26,509
2018 $24,720
2017 $22,387
2016 $21,316
2015 $19,163
2014 $16,448
2013 $14,867
2012 $13,277
2011 $11,700
2010 $10,707
Or maybe you mean same store sales! Oh wait, those have been up every quarter except one since Q4 2009.
I never understood why people online make shit up. People spout very easily googleable statements like "their revenue went down" so confidently, without bothering to check. They live in fantasy land where they pretend like the goal of a coffee shop is something akin to "serving the community" or "being a third place" when in actuality the point is to sell something for more than it costs to produce. You may want your coffee shop to be a third place. But it doesn't make it a viable business model.
MBA types get a lot of shit on this forum, but MBA types are good at some things. And those things include running a pretty simple business like a coffee shop. It's pretty simple math, you can set clear targets, estimate demand and balance trade offs like what to have on the menu and how much to charge. Sure there's things like investments and long term planning, but they do that as well, just without the romanitization.
Yawn — aggregate global numbers don’t represent every trial Starbucks has done at their stores, and this is based on my discussions with Starbucks finance staff about this phenomena.
But sure, I just made it up because my story (in simplified form) didn’t match the numbers you quickly found about global aggregates.
> They live in fantasy land where they pretend like the goal of a coffee shop is something akin to "serving the community" or "being a third place" when in actuality the point is to sell something for more than it costs to produce.
I think it’s interesting that because you couldn’t verify my personal anecdote on public data, you made extremely negative assumptions about me:
- I’m a liar.
- I don’t know about business from spending a decade in marketing, econ, and finance.
You also seem to not even understand the term “thirdspace” or realize that’s a product cafes, bars, and restaurants sell and from where they gain part of their value by being fun and social. Whoa!
> MBA types get a lot of shit on this forum, but MBA types are good at some things. And those things include running a pretty simple business like a coffee shop. It's pretty simple math, you can set clear targets, estimate demand and balance trade offs like what to have on the menu and how much to charge.
Except that this is untrue and a reflection of your own lack of information — though I agree MBAs get an unfair treatment around here.
However, you’re dead wrong about running a coffee shop being simple maximization or “simple math” — but I hope you keep it up. Small minds like yours causing problems keeps me employed to fix them.
Just an unaffiliated 3rd party observer here, but is it possible they meant revenue went down relative to corporate projections or didn't increase in line with other factors like inflation?
Starbucks did what you’re suggesting to increase turnover and profit at stores — but the opposite happened: sales dramatically dropped, even though the time to serve a single customer and the average customer stay both dropped.
The issue is that Starbucks doesn’t just sell coffee — they’re a cafe. And cafes are in the business of selling thirdspace, where you create fun memories with friends and family. So when they provided a substantially worse version of that product, it sullied their brand and lowered their overall profit, because people no longer associated coffee at their chain with good times.
Similarly, the owner of a small cafe I used to work from loved the three or four regulars who would come near open and stay all morning — us being visibly chatty in the large storefront windows would draw in more of the nearby joggers than if the store was empty. We were a free living ad that getting coffee there was a fun time and popular with locals.
I think you’re ignoring a lot of ecosystem complexity with your “optimization”.