10 Nov 2008
After a couple of ‘special’ shows the Mind Your Own Business Podcast returns to
its usual format.
Given these unusual times – there’s a new US President elect, in the UK the ruling
Labour Party that seemed to be in its death throes just a few months ago pulled
off a stunning by-election victory and interest rates are down to record lows (3%
in the UK) with one getting the impression that we’re not just heading for an economic
recession but it sometimes feels as if the economy is going to stop altogether –
you might well be thinking we’d be doing a show on Fixing the Economy.
But, you’d be wrong. Instead today’s show is about Fixing Starbucks.
And, you may well indeed think this is all rather frivolous. You might even think
so, what? What’s Starbucks got to do with my business?
However, it still has relevance – not that we’re particularly bothered what happens
to Starbucks but because it makes a good analogy of what can happen to our own businesses.
Resources from Mind Your Own Business
The Hippy Evil Empire
Seattle, Washington, has become a centre of West Coast chic. It is as cool as LA,
using the word “cool” in the modern sense, meaning “fashionable” – although it is
also cooler than LA in the more traditional sense of the word, meaning colder, and
It is therefore ironic that this global symbol of all that is hip and trendy is
also the home of two multinationals which have become symbols of the unacceptable
face of globalised, anti-competitive capitalism.
One of them, Microsoft, chose an affluent suburb of Seattle as its world headquarters,
but the other, Starbucks, is home-grown.
Starbucks’ status as local hero did not protect it from being a prime target of
rioters during the World Trade Organisation summit held in the city in 1999. They
were following an established tradition: whenever protests against globalisation
get out of hand, the violent fringe seems to make vandalising the nearest Starbucks
a top priority.
Starbucks themselves have always been perplexed by the hatred they provoke on the
left. They are, in many ways, a model of what those on the left would want a business
to be: their employment practices, like Microsoft’s, are generally liberal, and
they were one of the first multinationals to embrace “fair trade” – not in the traditional
sense, as a euphemism for protectionism, but in the sense of sourcing their products
in a way that they consider ethical.
They seem sincere about these principles and spend a great deal promoting them.
Yet there are people who spend a great deal of time – and money – criticising them.
There are whole websites dedicated to complaining about Starbucks over a range of
issues, including labour relations and the environment.
Does one believe Starbucks, who obviously have a vested interest in protecting their
image, or their critics, who can be, to put it politely, a bit strange?
In addition to being under constant attack from the political left, Starbucks is
also threatened from the right. An e-mail was circulated very widely alleging that
Starbucks had refused to supply coffee to US Forces in Afghanistan because they
opposed the war there.
This allegation was in turn denounced on the internet as an “urban myth”. Unfortunately,
the nature of the internet means that the denunciations are as unreliable as the
original allegation. Anyone can say anything online. A credible looking website
could disguise either a corporate stooge or a paranoid conspiracy theorist. Once
again, whom should one believe?
The most persistent allegation against Starbucks – one which has the potential to
bring left and right together – is the commonly held view that global chains like
Starbucks drive “small local coffee shops” out of business.
It is certainly true that there are a lot of Starbucks around, and many small local
coffee shops have disappeared.
However, it is also true that running a small local coffee shop has always been
a precarious business. Their average lifespan is notoriously short. Many are very
badly run. Most of those which have disappeared would have gone anyway. Starbucks
provided a convenient excuse.
Moreover, Starbucks can claim to be responsible for the revival of the whole coffee
house culture. The customer base of the old coffee shops was limited. It was the
global chains who really opened them out to everyone.
Few of the old coffee shops were on the high streets or in the prime locations favoured
by Starbucks. They could not afford them. They did not attract enough customers.
That may change. The recession is already altering spending patterns. If there is
a time for smaller, local coffee shops, it is now, when people may be looking for
an alternative to the expensive designer coffee.
However, the greater danger is that the coffee shop is one of the luxuries people
will cut out altogether.
Strange, but we may miss even the Starbucks when they are gone.
© Agincourt Productions