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	<title>Comments on: Why Stealth Starbucks Coffee Shops Aren&#8217;t  Local</title>
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	<link>http://unchainedinamerica.com/uia_dan/2009/11/27/why-stealth-starbucks-coffee-shops-arent-local/</link>
	<description>Dan's Blog about Not Shopping at Chain Stores and Restaurants</description>
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		<title>By: Joe McCarthy</title>
		<link>http://unchainedinamerica.com/uia_dan/2009/11/27/why-stealth-starbucks-coffee-shops-arent-local/comment-page-1/#comment-228</link>
		<dc:creator>Joe McCarthy</dc:creator>
		<pubDate>Fri, 27 Nov 2009 20:36:26 +0000</pubDate>
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		<description>I like to support local businesses, and am a big fan of independent coffee shops. I recently posted an entry on my blog on the topic of &lt;a href=&quot;http://gumption.typepad.com/blog/2009/11/coffee-conversation-community-and-culture-at-starbucks.html&quot; rel=&quot;nofollow&quot;&gt;&quot;coffee, conversation, community and culture at Starbucks&quot;&lt;/a&gt;, comparing and contrasting those dimensions of the Starbucks experience with my own experiences - and studies of others&#039; experiences - at independent coffeehouses in and around Seattle. 

I explicitly excluded economic considerations in my blog post, but I do think they are important, and so am glad to stumble upon this blog entry in which you delve into these issues.

I&#039;ve seen many other references to the $68 vs. $43 of local impact made by each $100 spent in chains vs. local businesses. Your article finally prompted me to hunt it down (here&#039;s a link to a PDF version of the &lt;a href=&quot;www.andersonvillestudy.com/AndersonvilleStudy.pdf&quot; rel=&quot;nofollow&quot;&gt;2004 Andersonville Study, by Civic Economics&lt;/a&gt;, that I believe you - and others - are referencing.

In reviewing the 33-page study, I see that they differentiate 3 different sectors, and that the &quot;restaurants&quot; sector, the local impacts of spending $100 are estimated at $76 (locals) and $60 (chains), yielding a &quot;local premium&quot; of 27%  for labor-intensive restaurants vs. 56% generally. The study did not include any coffeehouses - Panera probably represents the closest approximation among the chains, and I suspect &lt;a href=&quot;http://www.mhenry.net/&quot; rel=&quot;nofollow&quot;&gt;M Henry&lt;/a&gt; is the closest approximation among the locals - but I would expect that the relative ratio of labor expenses, which the study&#039;s authors suggest is one reason for the difference in local premiums across sectors, is even higher at coffeehouses than restaurants.

Finally, I wanted to offer an alternative perspective on some of the analysis contained in your table.

* A growing number of local coffeehouses represent an expansion of micro-chains (which I would define as having 3 or more stores). Many of these are locally owned, but the larger the number of stores, the more they start to take on the characteristics of chains (e.g., managers and baristas referring to &quot;corporate&quot; as having control over many aspects of the different stores), and some are moving into suburbs increasingly far from Seattle. I&#039;m not sure where you would draw the line between &quot;local&quot; and, say, &quot;regional&quot; - in general - but that may be an interesting feature to consider in some future post, as I now a number of restaurants, hardware stores, banks and other institutions exhibit similar growth and expansion patterns.

* While several local coffeeshouses roast their own beans - especially the micro-chains - many do not. However, several independent coffeehouses that I know rebrand white-labeled beans made by micro-chain roasters, and many buy their coffee from non-local roasters (e.g., Stumptown in Portland, 49th Parallel in Vancouver or Intelligentsia in Chicago).

* Many local coffeehouses do practice conversation practices, but some do not. I recently read an excellent review of &lt;a href=&quot;http://www.starbucksmelody.com/2009/11/14/commentary-recyclable-cups-starbucks/&quot; rel=&quot;nofollow&quot;&gt;recycling practices at Starbucks&lt;/a&gt; on another blog, in which the comments offer additional insights to the extensive information in the original post. Also, I think it&#039;s worth noting that the two new mercantile or &quot;street level&quot; Starbucks stores are undertaking very strong conservation measures, both in their design and construction as well as their daily operations.

I have visited both of these new stores recently, and have come away with generally favorable impressions of the quality of the coffee (they use Clover machines as well as Melitta &quot;pour-over&quot; cones, and as you note, have some coffees not available in traditional Starbucks stores). I&#039;ve also been impressed with the quality of the service, and while I&#039;ve been there in the daytimes, I&#039;ve heard that the addition of wine and beer to their menu helps liven and loosen things up in the evening, enhancing the sense of community in these stores. In any case, like you, I am interested to see whether / when these types of stores are piloted in other cities.</description>
		<content:encoded><![CDATA[<p>I like to support local businesses, and am a big fan of independent coffee shops. I recently posted an entry on my blog on the topic of <a href="http://gumption.typepad.com/blog/2009/11/coffee-conversation-community-and-culture-at-starbucks.html" rel="nofollow">&#8220;coffee, conversation, community and culture at Starbucks&#8221;</a>, comparing and contrasting those dimensions of the Starbucks experience with my own experiences &#8211; and studies of others&#8217; experiences &#8211; at independent coffeehouses in and around Seattle. </p>
<p>I explicitly excluded economic considerations in my blog post, but I do think they are important, and so am glad to stumble upon this blog entry in which you delve into these issues.</p>
<p>I&#8217;ve seen many other references to the $68 vs. $43 of local impact made by each $100 spent in chains vs. local businesses. Your article finally prompted me to hunt it down (here&#8217;s a link to a PDF version of the <a href="www.andersonvillestudy.com/AndersonvilleStudy.pdf" rel="nofollow">2004 Andersonville Study, by Civic Economics</a>, that I believe you &#8211; and others &#8211; are referencing.</p>
<p>In reviewing the 33-page study, I see that they differentiate 3 different sectors, and that the &#8220;restaurants&#8221; sector, the local impacts of spending $100 are estimated at $76 (locals) and $60 (chains), yielding a &#8220;local premium&#8221; of 27%  for labor-intensive restaurants vs. 56% generally. The study did not include any coffeehouses &#8211; Panera probably represents the closest approximation among the chains, and I suspect <a href="http://www.mhenry.net/" rel="nofollow">M Henry</a> is the closest approximation among the locals &#8211; but I would expect that the relative ratio of labor expenses, which the study&#8217;s authors suggest is one reason for the difference in local premiums across sectors, is even higher at coffeehouses than restaurants.</p>
<p>Finally, I wanted to offer an alternative perspective on some of the analysis contained in your table.</p>
<p>* A growing number of local coffeehouses represent an expansion of micro-chains (which I would define as having 3 or more stores). Many of these are locally owned, but the larger the number of stores, the more they start to take on the characteristics of chains (e.g., managers and baristas referring to &#8220;corporate&#8221; as having control over many aspects of the different stores), and some are moving into suburbs increasingly far from Seattle. I&#8217;m not sure where you would draw the line between &#8220;local&#8221; and, say, &#8220;regional&#8221; &#8211; in general &#8211; but that may be an interesting feature to consider in some future post, as I now a number of restaurants, hardware stores, banks and other institutions exhibit similar growth and expansion patterns.</p>
<p>* While several local coffeeshouses roast their own beans &#8211; especially the micro-chains &#8211; many do not. However, several independent coffeehouses that I know rebrand white-labeled beans made by micro-chain roasters, and many buy their coffee from non-local roasters (e.g., Stumptown in Portland, 49th Parallel in Vancouver or Intelligentsia in Chicago).</p>
<p>* Many local coffeehouses do practice conversation practices, but some do not. I recently read an excellent review of <a href="http://www.starbucksmelody.com/2009/11/14/commentary-recyclable-cups-starbucks/" rel="nofollow">recycling practices at Starbucks</a> on another blog, in which the comments offer additional insights to the extensive information in the original post. Also, I think it&#8217;s worth noting that the two new mercantile or &#8220;street level&#8221; Starbucks stores are undertaking very strong conservation measures, both in their design and construction as well as their daily operations.</p>
<p>I have visited both of these new stores recently, and have come away with generally favorable impressions of the quality of the coffee (they use Clover machines as well as Melitta &#8220;pour-over&#8221; cones, and as you note, have some coffees not available in traditional Starbucks stores). I&#8217;ve also been impressed with the quality of the service, and while I&#8217;ve been there in the daytimes, I&#8217;ve heard that the addition of wine and beer to their menu helps liven and loosen things up in the evening, enhancing the sense of community in these stores. In any case, like you, I am interested to see whether / when these types of stores are piloted in other cities.</p>
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