The maps both show to some extent how Starbucks overextended itself in frothy real estate areas. The map of official closings shows five stores doomed in Las Vegas, six in southern California, but none yet in Florida.The rumor map has six in Florida, seven in Vegas and 22 in southern California. Dallas, Minnesota, Oklahoma City and Omaha will be caffeine-deprived.
What will be interesting to see is whether Starbucks just has to cut back on stores that were part of the real estate bubble or whether their core, urban market is dying. Are they cutting just fat or muscle? We've already seen that people are cutting back on luxuries, Starbucks among them. The Starbucks stock (NASDAQ: SBUX) reached a high of $39.50 in October, 2006, but now trades at under $14.
The company says that many of the dying stores are near surviving stores, so customers won't have to walk far. They also say that 70% of the closing stores have opened in the last couple years. Will it finally be the end of the coffee shop bubble, with a Starbucks on multiple corners in an intersection? At Astor Place outside the AOL office in New York, there are still two Starbucks. A couple weeks ago I went to meet an editor "at the Astor Place Starbucks" and we went to different ones. There used to be a third before the Barnes and Noble closed. Could we get by with just one? (And by one, I mean one within 500 feet or so, because there are three others within four blocks).
The reactions to the closings will certainly be mixed. Plenty of suburbs stake their pride on having a Starbucks. Georges Yared was outraged on BloggingStocks about a particularly fun and prosperous Starbucks closing. My hometown of Des Plaines, IL, has pined for one for years, only to be spurned. The Chicago Daily Herald mourns the closing of two other stores. Meanwhile some labor unions and consumer advocates are cheering these developments on. Rev. Billy of the Church of Stop Shopping is pretty happy and hopes local businesses will pick up the slack.