Starbucks expands focus into low-income markets
Starbucks is expanding a program that tries to help low-income communities by opening coffee shops and hiring local workers.
The Seattle-based company plans to open or remodel 85 stores by 2025 in rural and urban communities across the U.S. That will bring to 100 the total number of community stores Starbucks has opened since it announced the program in 2015. Each store will hire local staff — including construction crews and artists — and will have dedicated community event spaces.
Starbucks will also partner with local United Way chapters to develop programming for each store, such as youth job training classes or mentorship groups.
Starbucks opened its first community store in Ferguson, Missouri, in 2016, two years after devastating riots that followed the shooting of an unarmed black man by police.
It has opened 13 other locations since, including stores in Baltimore, Chicago, Dallas, New Orleans and Jonesboro, Georgia. Another store will open this spring in Prince George’s County, Maryland. Starbucks estimates the stores have created more than 300 jobs.
All of the stores are in the U.S., although Starbucks says some franchisees in other countries, including Thailand and China, have also opened community stores.
Starbucks says most of the 85 stores will be new, but some will be remodels of existing stores. The company will consider various factors — including youth unemployment rates and low median household income — in deciding where to build them.
John Kelly, Starbucks’ executive vice president of public affairs and social impact, says the stores reflect Starbucks’ core belief in responsible capitalism. The stores are profitable, he said, and have the same menu and prices as regular Starbucks stores.
“This is not charity. These are successful stores,” Kelly said. “We’re defying a lot of the stereotypes and we’re proud to do so.”
Panera Bread had similarly tried to appeal to low-income communities by opening pay-what-youcan restaurants in 2010, but all of them have closed.
Starbucks also learned lessons from previous efforts. In 1998, the company partnered with Earvin “Magic” Johnson to develop stores in urban neighborhoods, but some closed because they weren’t economically viable. Kelly said Starbucks wants its new stores to be more connected to their communities.
“All of these programs are with the intent of being purposeful and profitable. It does not do a community any good to close a store,” Kelly said.
Starbucks learned that it has to partner with local leaders and groups like United Way so it can understand what each community needs. The company also recognizes there will be skeptics when its brand comes to town, so it tries to reach out and show them what a store can do for the local economy.