Your local indie coffee shop may be a Stealth Starbucks

A Starbucks in disguise: Seattle's 15th Avenue Coffe & Tea in 2009. Image: Getty/AFP

Coffee giant Starbucks is always looking for new ways to tighten its grip on the coffee market. Last year, to take one example, it launched “Starbucks Reserve®”,  a new line of Starbucks outlets finely tuned to corner the market of coffee drinkers looking for a more high-end experience.

Of course, there’s one subset of coffee drinkers the firm has yet to conquer: those who refuse to get their coffee from big coffee chains like Starbucks. But they’ve got a plan for that too: the Stealth Starbucks.

Stealth Starbucks actually have a considerable history. The first one opened in 2009 in Starbucks’s traditional stomping grounds, Seattle. The new store was named “15th Ave Coffee & Tea”, but the front door featured a telling disclaimer: “inspired by Starbucks”. In the years since, Starbucks has opened two more stealth locations in the city.

Word got out about these Stealth Starbucks, and though some reacted positively to them, others lashed out. Independent coffee shop owners were naturally displeased with the thought of a giant chain camouflaging itself and possibly siphoning off their business. As far away as Chicago, a local coffee shop owner called Stealth Starbucks “the equivalent of unmarked cars”.

But Starbucks’s CEO, Howard Schultz, has maintained that these outfits were never intended to dupe indie-loving coffee customers. “It wasn't so much that we were trying to hide the brand,” he said in a 2010 interview with Marketing Magazine. “[We were] trying to do things in those stores that we did not feel were appropriate for Starbucks.”

Whatever the motivation, the project nevertheless did well enough that the company’s higher-ups decided to take the project on the road, from sleepless Seattle to another city that never sleeps. In 2012, the chain opened its first stealth Starbucks in New York, inside a Macys department store.

There are hints that there might be more. Veteran barista Molly Osberg feels that New York City’s unique love of independent coffee shops may be behind Starbucks’s move. “Almost 60 percent of New York coffee shops weren’t associated with a corporation,” she wrote in a recent article in The Awl. “The trend is so pervasive that Starbucks itself opened its own unbranded coffee shops, sans the company’s own name.” 

In the midst of the continuing hubbub over Stealth Starbucks, the fundamental question still remains: why is Starbucks doing this? Aren’t they making enough money already as the world’s biggest coffee chain? Is their motive really, as their CEO says, to serve as a “laboratory” for new products and ideas?


The answer may actually be yes, though for much more cynical reasons than any Starbucks rep would care to admit. Mike Hudson is the founder of the independent coffee chain Handsome Coffee, which was later acquired by Blue Bottle Coffee. He thinks that these stores are effectively a mechanism for Starbucks to test out which ideas it’s going to steal from potential competitors.

“Given Starbucks’s market position, it could fall prey to a competitor with innovative ideas,” Hudson says. “The stealth outlets are a grossly patronising move by Starbucks to stay current. But they’re also a legitimate attempt to make better coffee, in the event America decides that Starbucks’s mass product offering is inferior to ‘the new thing’.”

While marketing calculus and experimentation may be the prime motivator in the creation of Stealth Starbucks, the outlets are still intended to turn a profit – and in that sense it’s significant that the mega-chain opted to open them exclusively in Seattle and New York. Despite the standardisation of consumer preferences worldwide after decades of omnipresent brand-based marketing, local preferences can still vary widely. These two cities, the move suggests, are the places Starbucks feels must be hungriest for some kind of change.

But ultimately, the most significant development to emerge from the Stealth Starbucks program may be its influence on the strategies employed on the Starbucks Reserve outlets. A New York Times article from last December confirms that the outlet’s logo, which abandons the traditional Starbucks “mermaid” seal, is a deliberate attempt to distance the Reserve locations from the standard Starbucks brand.

Starbucks plans to open roughly 100 outlets under the “Starbucks Reserve” branding scheme, far more than the four Stealth Starbucks outlets it currently operates. But those stealth Starbucks are still going strong, and there are no plans to close them in the near future. That Starbucks has made such inroads into the anti-Starbucks market is, in a way, a testament to quite how sophisticated modern marketing has become. 

 
 
 
 

Here are eight thoughts on TfL’s proposed cuts to London’s bus network

A number 12 bus crosses Westminster Bridge. Image: Getty.

In 2016, the urbanism blog City Observatory had a modest proposal for how American cities could sort out their transport systems: “Londonize”.

Its theory, the name of which referenced another popular urbanism blog, Copenhagenize, was that the key plank of Transport for London’s success was something that even transport nerds did not consider very sexy: its buses.

Though the Tube might get more glamorous press, London’s bus service really is impressively massive: It carries roughly 2.3bn passengers per year—much more than the Tube (1.3bn), close to the New York City subway (2.8bn), and nearly half as much as every bus service in America combined (5.1bn), while serving a population roughly 1/35 as large.

How has TfL done this? By making its bus network high frequency, reliable, relatively easy to understand and comprehensive. We rarely talk about this, because the tube map is far more fun – but the reason it’s so difficult to fall off the transport network in Greater London is because you’re never that far from a bus.

Given all that, we should probably talk about TfL’s plans to rethink – and in most cases, cut – as many as 36 different central London bus services over the next few months.

I’m not going to rehash details of the changes on which TfL is consulting from next month: there are just too many of them, and anyway it’s someone else’s scoop. The story was originally broken by Darryl Chamberlain over on 853 London; there’s also some fascinating analysis on Diamond Geezer’s blog. You should read both of those stories, though preferably not before you’ve finished reading this one.

Before offering my own analysis of the proposed changes, though, I should offer a few examples. More than a dozen routes are facing a trim: the 59 from King’s Cross back to Euston, the 113 from Oxford Circle to Marble Arch, the 171 from Holborn all the way down to Elephant & Castle and so on. A couple – the 10, the 48, the C2, and at most times the special routemaster version of the 15 – are being withdrawn altogether.

On, and one new route is planned – the 311, from Fulham Broadway to Oxford Circus. This will help plug some of the cuts to the 11, 19 and 22.

So, what does all this mean? Some thoughts:

1) This might not quite be as awful as it initially sounds

TfL says that demand for buses has fallen by around 10 per cent in London in recent years. It predicts it’ll fall further when Crossrail opens, as passengers switch to the new line, or to the tube routes relieved by the new line. So: the idea of taking some unwanted capacity out of the system is not, in itself, terrible.

Striping out unnecessary buses should also improve air quality in some of London’s worst pollution hot spots, and improve traffic flow, hopefully speeding up journeys on those buses that remain. 

A map from the presentation in which TfL explained its plans, showing the reduction in bus numbers on key arteries. Hilariously, notes Darryl Chamberlain, “It no longer produces its own maps, so has had to use one prepared by a bus enthusiast”.

The plans might even free up buses and staff to increase frequencies in outer London where demand hasn’t fallen – though these plans won’t be unveiled until next year and, for reasons I’ll come to below, I’ll believe it when we see it.

2) For many bus users, a lot of these changes will pass almost unnoticed

By my count, I use nine of the affected routes with any regularity – but only three of the changes are things that I’m likely to be at all inconvenienced by. Most of the changes either affect a part of the route I don’t take, or one where there are easy, and pain free alternatives.

This is anecdotal, obviously – perhaps I’m just lucky. But my suspicion is that a lot of these changes will go unnoticed by most passengers. It’s only the sheer number of them happening at once that makes this look like a big deal.

3) The Hopper fare makes this easier...

Once upon a time, if you had to switch buses, you had to pay a second fare. This isn’t true of journeys on the tube or railways – and since bus passengers have, on average, less money than tube passengers, it amounted to a pretty unfair tax on poorer Londoners.

But in January, in what is probably his most notable policy achievement of his two years in office so far, London’s mayor Sadiq Khan changed the rules. Now you can take as many buses as you want within an hour, for a single fare: that means you can switch buses without paying a penalty.

That will have made it easier for TfL to cut routes back: replacing a direct bus journey with one that requires a change no longer means imposing a financial penalty on passengers.


4) ...but not that easy

That’s about where the good news stops, though – because there are reasons other than cost why people prefer direct bus routes. Needing to change buses will be difficult for anyone with any form of mobility impairment, for example. Even for those of us lucky enough not to fall into that category, it’ll be annoying: it’s just easier to stay in one seat for 40 minutes than to get turfed off and have to fight for a new one halfway through.

More than that, from the passengers’ point of view, excess capacity feels quite good a lot of the time: it means your bus may well be nice and empty. Reducing the number of buses along those key corridors will also make those that remain more crowded.

5) The motive is almost certainly financial

Another of Sadiq Khan’s big policy promises was to freeze fares. He made this promise at a time when central government is massively reducing the financial support it gives TfL (the work, Chamberlain notes, of Evening Standard editor George Osborne, back when he was chancellor). And the Hopper fare, while a great idea in many ways, means a further reduction in income.

So: TfL is scrambling for cash: this is why I remain cynical about those new outer London bus routes. I would be amazed if money wasn’t a motivation here, not least because...

6) TfL thinks no one will notice

Any attempt to reduce tube frequencies, let alone close a station, would result in uproar. Hashtag campaigners! Angry people pointing at things in local newspapers! Damning reports on the front of the Evening Standard from the bloke who made it happen!

Buses, though? Their routes change, slightly, all the time. And do you really notice whether your local route comes every 10 minutes or every 12? That’s not to mention the fact that bus passengers, as previously noted, tend to be poorer – and so, less vocal – than tube passengers.

So cuts, and the savings they bring, are much easier to sneak through. TfL probably would have gotten away with it, too, if it hadn’t been for those meddling bloggers.

Although...

7) Scrapping the C2 might be a mistake

The C2 runs from Parliament Hill, through Kentish Town and Camden to Oxford Circus. In other words, it links north London, where a lot of journalists live, to the offices of the BBC and Buzzfeed.

As occasional New Statesman writer James Ball notes, this is probably not the easiest route to quietly shelve.

8) None of this is set in stone

The consultation doesn’t even begin until next month and then will run for six weeks – so all these plans may yet be forgotten. We shall see.

Anyway – here’s Darryl Chamberlain’s original scoop, and here’s some detailed analysis on Diamond Geezer. Please support your local bloggers by reading them.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites.

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