Great Post. I love Starbucks and competition two powerful forces in business.

Let's be honest with ourselves here. $2 (w/ tax) for a cut of venti coffee is not expensive. Those food stands sell coffee for $1 and the cups are really small. I personally drink a lot of coffee, so Starbucks is a bargain. Let's not forget their free refill.

@drjayphd: Guy: Can I help you?
Bart: I'd like to get my ears pierced!
Guy: Better make it quick, kiddo, in five minutes this place is becoming a Starbucks!

Sounds like my neighborhood near Boston. Two very successful local breakfast places with lines out the door every weekend. One moves next door for more space and, lo and behold, the landlord takes the vacant space and makes a new breakfast space! Stealing the people standing in line in the rain is a time-honored business practice.

I'm sure it wouldn't have worked nearly as well if the Starbucks had had its own parking lot. Or if they'd been on a highway and not a street that does tons of pedestrian traffic.

Very clever.

Y gotta give em credit though: I do think that it was pretty clever to re-market extremely high calorie milkshakes as 'coffee.' Fatties rejoice-- there's a sBucks on every corner.

This tactic would only work in heavily populated areas. No way in hell is a local Starbucks going to boost mom and pop shops in my area. The lines are always small or nonexistent at either of my local Starbucks.

Now the one located inside the local mall did and is doing so well that Starbucks opened a second one! In contrast, there is a no name shop on the top floor and it appears to do well. But it did well before Starbucks was there, so I can't say Starbucks helped generate sales.

@smallestmills: *IF* you offer a better product. Otherwise, you want a captive audience. Do you think anyone would eat Sbarro if there was a decent pizza place nearby?

"Starbucks Coffee" is one of the biggest misnomers around. All their sales and profits largely center on milk and syrup. Coffee actually has little to do with it. Their genius stroke was in making people think they liked coffee, where obviously their greatest successes have been at making converts of people who would otherwise avoid the stuff.

The two indie coffee houses in town have big seating areas with comfy chairs and couches. The Caribou and Dunn Brothers locations are much larger and all have fireplaces and sofas and chairs. A couple of these do music on Friday nights. Caribou has free wifi.

The non-Starbucks locations are doing rather well and you see them rather crowded most days. Around here Starbucks is becoming more of the coffee on the go type of place.

See, now here's where the problems start. Some yutz going and saying 'Open next to Starbucks', but not being more specific. In an urban location with mostly foot traffic, absolutely. In a stripmall? No. People stop for their Starbucks or Dunkies, not Skippy's Watered Down Whisky in a Green Tea Bottle. Just sayin'.

Where I live, this joint [www.schwartzsdeli.com] is heavily patronized; very often, people will wait 30 minutes in a line outside, even when it's minus 20 degrees.

The people uwilling to line-up simply spill over in this joint three doors further: [www.tabledhote.com], which serves just as good (albeit radically different) food.

My town had two independent coffee shops before a Starbucks finally moved into the area. One lasted about a year and half before closing and the other stays open but is a shadow of it's former self. Clearly it isn't as cut and dry as slate would like to have us think.

@cheera: can you even call where you live a CITY if you don't have a starbucks? lol.

I favor my local coffee places as much as possible, but leave it to fargon Dunkin' Donuts to put up a new place that's on my commute path to work and in about the most convenient place it could be.

I rarely have Starbucks.. can't stand the coffee. I do have a friend who goes there every day and gets some no-fat blah blah blah drink (no fat, but massive sugar) for around $5. That's insane.

I also later talked to the owner, and her business was doing poorly even being open 24hrs vs starbucks 18 hrs.

I didn't think so.

A friend of mine owns a couple of Domino's, he said that when Papa John's came into the area his sells went through the roof.

No, I am awesome.

@SteveBMD: Read the first paragraph. This started in 1991. Unless is was a loooooooooooong buy-out.