Starbucks, Competition, and Loyalty

I saw this in Portland, Oregon, tonight:


Now that is close competition. It looks like lots of companies over the years have figured out what makes Starbucks tick, and they're trying to do it better or cheaper; and I'm not so sure Starbucks has innovated well enough to stay ahead of the competition.

Starbucks plans to close 300 stores (200 in the U.S.) in addition to the 600 closures announced last July. Many folks are beginning to prefer Panera over Starbucks for their coffee (free refills, free wifi, tables and outlets, and more food options too). There's a constant debate about Peets versus Starbucks (Peets has pretty good coffee, but their atmosphere does not compare). And then, for the on-the-go-just-gotta-get-some-good-but-cheap-coffee-to-start-my-day kind of person, there's always the McDonalds premium roast brewed coffee option.

And McDonalds, trying to take even more competition with its new McCafe, is serving espresso based drinks now too. Yesterday, during a road trip... we stopped at McDonalds, and I needed coffee, and we couldn't get to a Starbucks. So...


... I decided to give McDonalds $2.89 mocha a try.
Pros: It was only $2.89. It tasted sweet and rich, and it was quite enjoyable.
Cons: It tasted more like a hot chocolate with a little bit of coffee thrown in.
Conclusion: I'll stick with my more-customizable (though more expensive) Starbucks drink, but I'll buy a box of Swiss Miss to make in the comfort of my own home.

I was thinking about what keeps me loyal to Starbucks, and when my loyalty may exceed rationality. I mean, Starbucks is more expensive. And their brewed coffee really isn't as good as many of the alternatives out there. I think the reason I'm loyal is... the atmosphere. It's the enjoyment I get out of sitting in a place that, strangely enough, feels like home... and being there for a good couple of hours. That must be it. Because I hardly ever get Starbucks to go. Why would I? It's too expensive. I'm only willing to pay for the drink if I know that some of what I'm paying... is rent.

So, Starbucks, you continue to have my loyalty. And I understand that, until you come up with something that rockets you ahead of the competition and propels you out of this gravitational pull called a recession, that you're going to have to close some stores. Ok, fine. But please just don't close any more stores where I'm paying rent.