The price of Starbucks

In Xi’An, I went into the Starbucks, but decided I didn’t want to spend more for coffee there than I do in the USA. So I went to the McDonalds nearby, and had coffee for about a dollar.

Needed that caffeine for the jetlag pick-me-up.

I noticed the same. Everywhere you go in China, McDonalds and Pizza Hut are very busy. And easily several times more expensive than a ‘decent’ restaurant, not to mention the still very good cheap restaurants.

The people in there are mostly rich&hip teenagers, grown-ups appear to realize the stupidity of eating there. But Starbucks seems to attract even rich adults, and asks even more ridiculous prices.

There’s also a Starbucks right on the edge of the inner sanctum of the Forbidden City, where only 100 years ago, only the Emperor and his closest household members were allowed. It rather neatly encapsulates China’s rapid and remarkable politico-economic transition.

I think that the Xi’an leadin is weak. For one thing, Xi’an hasn’t been the Chinese capital for a thousand years. Like many, many Chinese cities, Xi’an is old and has a history. But it’s basically just another Chinese city. (China has about ten major ex-capitals, not counting the nomad capitals on the steppe.)

Second, the Far East has had a strong coffee culture for at least a couple decades. In Taiwan in 1983 I regularly went to a coffee shop better than any I’ve ever seen in the US. (Choice of 17 beans ground right in front of you and brewed one cup at a time). But it was tremendously expensive even by Maerican standards. You were paying for an elite experience in a place where coffee was not a staple, but a luxury.

So the story is “American franchising in China” not “Chinese are drinking coffee! Expensive coffee! In the ancient capital city.”

There’s also a Starbucks right on the edge of the inner sanctum of the Forbidden City …

I was there last year and was told the same thing. I don’t think it is a Starbucks any more (if it ever was). The price was so high that it was empty, despite this inner garden being thronged with Westerners. About 25 meters away I could buy a Diet Coke (1/2 liter size) for about a dollar.

Interesting that in the linked article (and maybe the cover of the book- I can’t tell) there is a starbucks in Russia. Starbucks has only recently managed to open there and I’m slighly skeptical that it will do very well. The premium for “foreign” brands has gone down greatly there and there are both several good local chains in Moscow and Petersburg and some good independent stores. All of these serve coffee that’s as good, better, more interesting, and more locally attuned foods and drinks, and some are cheaper. I’d suspect that if Starbucks is going to be popular in Russia it will primarily be with ex-pats and tourists and secondarily in cities beyond Petersburg and Moscow that do not have an already established coffee culture. (Since most of those cities are much poorer the market will be smaller, of course.)

Reading the review, with its repeated references to “overpriced coffee drinks”, and the suggestion that Starbucks simply took the good old American 25 cent cuppa and marked the price up, I get the impression that Martin O’Neill has never seen an espresso machine.

John Quiggin — your impression is very much mistaken. Of course, it’s not as if the espresso, as such, is the product on which the success of Starbucks has been built. Rather, they have created a market for drinks that involve a double espresso lost somewhere in a vat of warm (and often flavoured) milk, thereby giving us such “coffee drinks” (hence my use of the term) as the mocha, vanilla latte, etc., etc.

Even what passes for a ‘cappuccino’ in places like Starbucks is fairly unrecognizable when compared with, for example, what Howard Schultz would have been served on his visit to Milan in 1983. (Not least because it’s about four times the size, and correspondingly diluted.)

Moreover, I don’t suggest that Starbucks is selling the *very same thing* as the old 25 cent cup of diner coffee. All I said was that Starbucks is selling a cheap commodity at a massive mark-up. And I assume that you don’t mean to disagree with that claim.

Starbucks, in the US, seems to have rushed into a market dominated by Folger’s and Sanka. As I remember it, unless you were lucky enough to live in or near a large city or college town, much of your coffee came from a can or jar. Fresh-ground and brewed coffee was a luxury. Starbucks made it not so much a luxury – you can go to any airport and get coffee, or a froofy coffee drink, and you used to take your chances in that regard. Starbucks is by no means the best coffee in the world but it’s a damn sight better than that abomination known as “freeze-dried coffee crystals.”

Martin, I concede that I misread you, but I think the point at #17 is relevant. Starbucks was successful in the US primarily because it was offering something actually new to (the great bulk of) the US market, even if radically vulgarised to meet mass market tastes.

The advantages of the first move have been parlayed into an “upscale” image and a corresponding capacity to inflate margins that is only now being eroded in the US, and remains strong in countries where a US brand image is a big asset.

BTW, although they don’t exactly advertise it (in fact I think they used to keep it secret) Starbucks will sell you an adequate double espresso at a reasonably competitive price, and will sometimes even give it to you in an actual cup.

There is also a humble little Starbucks right next door to the St. Paul’s Cathedral.

I think what many people miss about Starbucks is that it is also selling convenience: you can run in an get a huge cup of coffee to go in a few minutes. You can also get that at a McDonalds, but Starbucks are actually easier to find than McDonalds.

I’m surprised that with so many regular travellers posting here, more commenters haven’t bothered to point out the obvious, that in many countries Starbucks is the only place one can easily find a decent espresso. In London in 1994, I would have hacked my way through 15 dodgy geezers with a comb to get to a decent coffee, but sadly there was no Starbucks at that time. I know Australians who have become converts to Starbucks after a month in London.

Far Eastern coffee culture there may be, but at least here in Japan the “coffee culture” is overpriced and overrated. The standard “Japanese” coffee is a “Blend coffee” for 500 yen; starbucks double espresso (or the vastly superior local chain Tullys) is 350. And much better, and espresso. At least in the Japanese starbucks the service is at typical high Japanese standards, so you don’t lose out on much. And they’re open before 11am!

I think the starbucks/non-starbucks debate is like the PC vs. Apple debate, only important. And the answer is obvious: when the local coffee is shit, starbucks are a saviour.

I know Australians who have become converts to Starbucks after a month in London.

Except that Antipodeans now open coffee shops in London.

There’s also a Starbucks right on the edge of the inner sanctum of the Forbidden City, where only 100 years ago, only the Emperor and his closest household members were allowed.

…and I didn’t even realise Starbucks /existed/ 100 years ago, never mind that it used to have such a restrictive admissions policy.

In London in 1994, I would have hacked my way through 15 dodgy geezers with a comb to get to a decent coffee, but sadly there was no Starbucks at that time.

Err, did you not spot the hundreds of cafés run by slightly disshevelled Italians and Turks? Even in the days before a Starbucks, Nero or Costa on every corner, London was not a bad place to get an espresso…

Come on, Starbucks in China (!!) is just a thinly reworked version of “Woo! KFC in the Forbidden City!” stories from 1994.

@23.
cw: that was certainly more or less the impression I had of Howard Schultz from reading about him. Any good stories about how his character manifested itself?

Isn’t this an old story? Levi’s created “vulgarized” but serviceable clothing, which took on a cachet such that many people in foreign countries bought them, probably in some instances even at higher prices than local garb. Disney and Jerry Bruckheimer packaged “vulgarized” entertainment that has found success in world markets.

And just as Starbuck’s coffee is not what one might find in Milan, American (and Japanese) pizza is not what one would find in Naples, and American bagels are not what one would have found on the Lower East Side in 1920. It suits us.

but was closed last year because of it was undermining solemnity

That’s a weird coincidence; I once got thrown out of a Starbucks for the same reason.

In London in 1994, I would have hacked my way through 15 dodgy geezers with a comb to get to a decent coffee, but sadly there was no Starbucks at that time. I know Australians who have become converts to Starbucks after a month in London.

In a similar vein to John B, I suggest you weren’t looking closely enough. Apart from Costa and Caffe Nero, there have always been numerous coffee/lunchtime sandwich places doing decent coffee (I’m told – not a coffee drinker myself).

But here’s something no one has touched on yet – the tea in Starbucks is disgusting . I have to deal with it weekly on Tuesdays because their comfty sofas and friendly mother-and-baby-group atmosphere. For gawdsake though, I wish they’d just buy some bog standard tea bags instead of pushing that Tazo crap.

Starbucks has had the effect of improving the competition. You can get better coffee more easily elsewhere because it exists. But at least here in North Essex, their expresso is undrinkable: thin and sour; and I have rather grown out of milk shake. The best chain in Britain in Cafe Ner[od] but there is plenty of good Italian made coffee available in London, even in the tourist parts. There is for instance a very good Italian expresso/sandwich bar right behind Tower records off Picadilly Circus.

Martin: can you please explain how coffee growers “diversify” into producing cocaine?

Coca (but not cocaine) has been grown and used in the Andes for a looooooong time. Hard to see too many coffee growers getting into the cocaine production side of things and a pretty insensitive juxtaposition…

[/posted from Starbucks in Lima, Peru. Definitely an aspirational brand here. Definitely a better cup of coffee than nescafe (Crystal’s point). Starbucks in Peru also has free wireless — a distinct improvement on the American version.]

Not confused, just wondering why we can’t have a bit more culturally sensitivy when spreading negative stereotypes about farmers in the developing world (99.9% of whom will never be involved in the production of illicit materials).