Starbucks cafes now exceed McDonald’s, but are there too many?
In the great coffee wars, Starbucks is now outpacing McDonald’s. After opening 2,000 new cafes nationwide in the last three years, they currently number is 14,300 U.S. locations according to The Wall Street Journal. That’s just a few hundred higher than McDonald’s, in case anyone is keeping count.
“What I found shocking is that this now just became news,” said KIRO Radio’s Tom Tangney. “Because I would have guessed that they crested a number of years ago. It seemed then that there were three on every corner, and now it feels like there are only two on every corner.”
While it may be surprising to hear that you’re more likely to spot Starbucks’ nautical siren logo than the Golden Arches, both are still far outnumbered by Subway. They sling sandwiches at approximately 25,800 U.S. locations, nearly as much as McDonald’s and Starbucks combined. Not that many people buy coffee at Subway.
The news comes on the heels of an eventful few months for the coffee behemoth. They recently closed all their locations for racial bias training after a controversial incident involving two customers. Starbucks has opened all their bathrooms to non-paying customers, meaning there are now about 14,300 public bathrooms. And the company also announced that CEO Howard Schultz is stepping down.
And this week, the company said it’s raising the price of regular drip coffee by about 10 to 20 cents. Prices for more elaborate drinks like iced coffees and lattes will remain the same.
Starbucks may be experiencing slowed growth due to over-saturation
Since the country is by no means lacking in places to get coffee, this may be a sign of over-saturation. Starbucks shares declined 8 percent in the past year, and numerous analysts have argued that the company isn’t necessarily reaching new customers, but potentially causing individual locations to draw traffic away from each other, and ultimately cannibalizing their own sales.
“The question is: have they reached a saturation point?” Tangney said. “One of the people who was mostly aggressively pushing opening new stores was none other than Howard Schultz. The fact that he’s stepping down may indicate that they may be retrenching a bit.”
- Tune in to KIRO Radio weekdays at 3pm for The Tom and Curley Show.