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Say-It-Ain't-So Joe.
A very interesting article in today's USA Today about alleged anti-competitive and predatory business practices by Starbucks. The article reports that a small independent operator in Bellevue, Washington decided she'd had enough and isn't going to take it anymore. She's not going to be pushed out, squashed, taken over, or driven out. I don't blame her.
Analysts (and stockholders) will watch this action very closely, indeed. If the published allegations prove to be true, the coffee-bean behemoth's reputation and valuation are both likely to suffer. Based on the story, I can't help but believe that Starbucks' strategies are not only nasty and aggressive, but that this suit will successfully attain class-action status.
It appears that a lot of small business-people have been hurt and, worse, that a lot of consumers are being deprived of the choice to support diversity of choice among independent coffee venues.
What is it about Washington State and the metro-Seattle area, anyway? First, Microsoft and now, Starbucks. Are success and empire synonymous? How much money and power are enough?
In both cases, bullyish business practices are not only seething with aggression and coercion, but the objects of empire have personally had to endure threats and intimidation. Evidently, if you find yourself competing with the big boys, when you stand up for yourself you find yourself on the receiving end of thuggish behavior. What a turn-off!
As of late, I've come to wonder whether my own instinctive impulse to support the underdog has become anomalous in the broader USA culture. I've always thought that standing up for the little guy and insisting on fairness and a level playing field are part of what it means to be American. Maybe things have changed and I just didn't get the memo.
I can't help but think about the "greed scene" in the movie, "Wall Street," and Michael Douglas' brassy "greed-is-good" speech. It turned my stomach then; it turns my stomach now. I wonder, "Am I alone?"
When it comes to brand, I've been an admirer of the Starbucks story. Their championship of growers and the fair treatment of coffee workers (including benefits for their people) have heartened me. But, a lot of that good brand equity has been undone as of late. Today's news can't help but propel that feeling further.
I read about these alleged predatory practices - and I admit that I believe them to be true - and I don't want to spend another cent in Starbucks, no matter how grandé their aspirations, successes, or lattés may be.
I don't associate with thugs and I don't drink their coffee - caffeine jones or no caffeine jones.
Posted on December 20, 2006 03:56 PM | Permalink
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Comments
Neill:
Good post - God bless the little guy! (They usually make the best coffee anyway...)
This is reminding me of another Starbucks vs. Little guy incident a few years ago. Starbucks went after the HaidaBucks cafe up in Northern BC over the use of the word "Bucks." It's detailed on their site at http://www.lanebaldwin.com/hbc/
(but, long story short, Starbucks dropped the suit.)