Market Overview

Starbucks Wants the Bar Bucks

Want a Grandé Budweiser? How about a Chai Tea Latté with a tequila shooter? Want to make your soy Espresso Macchiato Irish? Want your glass of Merlot served with a Rice Krispie square?

Well, all of those things may be possible very soon because, having introduced beer and wine to a Seattle café back in October 2010, Starbucks (NASDAQ: SBUX) has announced that it is planning to sell alcohol in up to 25 locations by the end of 2012, focusing on new stores in California, Atlanta and Chicago.

Apparently, that Seattle experiment was a great success, and why wouldn't it be? As a member of the Benzinga team so eloquently pointed out, “who would have thought it? People like beer.”

The potential is huge, although some critics are wondering if the move will take away from the spirit of the brand. It would seem that SBUX knows what it is doing though, and it is not about to turn into just another high street bar.

The chain, which has 10,700 U.S cafés, is also planning on selling fruit-and-cheese plates and focaccia with olive oil, while beer will sell for $5 and wine from $7 to $9. That is a clear indication that Starbucks is looking towards the high end bar market, while it is unlikely to start selling chicken wings and the “monster Starbucks burger”, and screen football and hockey games. Bit of a shame, that.

Community groups are voicing concerns that this will create more problems than it is worth, that the relaxed, family-friendly vibe will be gone. Clarice Turner, SBUX's senior vice president of U.S. operations, on the other hand, thinks that the move is a natural progression for a brand associated with winding down after a tough day.

According to Fox News, “Reuters reports that some restaurant experts say that selling alcoholic beverages could anger community groups and complicate the company's operations.”

It will be interesting to see if Starbucks goes on to expand the idea into other stores after this year. We cannot imagine that Starbucks will suddenly become filled with drunk rabble, together with bar fights, peanut shells and vomit, although one might argue that would make the place worth visiting. Rather, you are likely to see pseudo novelists writing masterpiece with a beer rather than a frothy coffee.

Not much difference there.

Posted-In: News Retail Sales General Best of Benzinga

 

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