Starbucks has announced a five-year growth program that will see it double the number of locations from the present 12,000 worldwide to about 24,000. It is a kind of farewell challenge to the firm from retiring Starbucks CEO Howard Schultz. The Starbucks reputation for coffee continues to be a strong one. But the company has been under intense pressure in the U.S. from Dunkin Donuts and McDonald’s and in Canada from Tim Hortons. All these coffee houses have out-flanked Starbucks where it is weakest — in the food department. They all sell a greater variety of items. In Canada, Tim Hortons owns a lunch business that in other circumstances might well belong to Starbucks. Tim’s has been aggressive in growing its outlets too. Sometimes they aren’t too big — like the locations in the Couche Tard-owned On-The-Run stores at Esso stations — but they are usually very busy. A large question mark over the Starbucks expansion is whether it will seek drive-through stores like Tim’s. Or will it aim for more “in-store” locations, another Tim’s favorite.
I still remember the original McCafe ads: “Four bucks is dumb”, a shot across the bow of insanely priced Starbucks drinks. This is doubly so in Canada, where Tim Hortons also offers far better prices, as well as a coffee lover literally by millions.
They have a long way to go proving they can get comparable food at a similar price point, as well. I’ve found their breakfast options especially priced as “gourmet” items but tasting no better than what their competitors produce.