Starbucks as Demographic Indicator
September 11, 2008
My leading demographic indicator is Starbucks. Whenever someone asks me to speak to a news staff or college class about covering the New America, my first move is to check out the Starbucks locations.
Story idea: Look at the 600 stores that Starbucks is closing. Map them. Then overlay income and race information and see what you get.
Starbucks, you see, is into big bucks. The Starbucks customer is upper-middle class, usually white and college-educated. Starbucks created an affluent and vibrant caf?© society in upper-middle-class suburbs, high-income city neighborhoods and prestigious college campuses. The green-and-white Starbucks logo is a sought-after status symbol.
The New York Times made that point in an Aug. 2 editorial. The Starbucks in downtown Newark, N.J., is one of the 600 recently announced to be closed. "When the Broad Street Starbucks opened almost eight years ago it was seen as a herald of the city's resurgence," The Times wrote. Now the closing sends another kind of message for the still-gritty Newark.
For some time, Starbucks owner Howard Schultz didn't think black people (and poor people) drank coffee or fit his business model, or so goes the history that former Sacramento Kings basketball star and subsequent businessman Kevin Johnson recounted to members of the American Society of Newspaper Editors in 2006.
It took, he said, a little black magic to change Schultz's mind - in the form of former Los Angeles Lakers great Earvin "Magic" Johnson, now a real estate developer who builds shopping centers in black upper-middle-class neighborhoods.
Kevin Johnson regaled the ASNE editors with the story of how Magic, courted Schultz. He wanted Starbucks as a tenant in his developments, so he called Schultz, invited him to Lakers basketball games and then turned on the charm. Schultz finally agreed to let Magic open a Starbucks in one of his first shopping centers, in Los Angeles.
It usually takes four years to recoup the initial investment in a Starbucks. Magic did it in two years, Kevin Johnson said. That was proof enough for Schultz. Magic's company now operates more than 100 Starbucks franchises around the country, all in predominately minority areas. One of his stores in Detroit has closed, but another in the city remains open.
After retiring from the Kings, Kevin Johnson became a real estate developer in Oak Park, his prosperous former neighborhood in Sacramento. One of his developments includes a Starbucks.
I tracked my own migrations around the country through Starbucks nation, and here is what I found:
In Lynchburg, Va., where I was born, Starbucks has three locations. One is in the shopping center built near the late Rev. Jerry Falwell's Liberty University, another in an area with expensive stores and new housing, and a third in the wealthiest neighborhood, Boonsboro.
I grew up in Washington, D.C., where the U.S. Capitol divides not only east from west, but in some ways black from white. About 20 Starbucks are located west of the U.S. Capitol. This includes downtown, the predominately white neighborhood of Georgetown and the areas of the city that have largely transitioned from black to white.
Five freestanding Starbucks are located east of the Capitol, yet four are within walking distance of the Capitol in predominately white neighborhoods. The fifth is farther away, at Catholic University.
A university campus is sometimes thought of as prime Starbucks territory. But here again demographics prevail. Howard University is perhaps the most prestigious historically black college in the nation. Howard has a Starbucks - but only because Magic put one there.
After my career as a reporter and editor at the Washington Post, I moved to the Detroit Free Press. Detroit is the 11th-largest city in the United States. There, Starbucks lists seven locations. Three are closing. Of the four remaining, two are downtown, one is in the medical center area just north of downtown and the fourth is at Wayne State University. There is no Starbucks in a residential neighborhood of Detroit.
I was managing editor of the newspaper in Utica, N.Y., a lovely blue-collar city in the center of the state that is oozing population. The median family income is less than $30,000 a year. There is no Starbucks here. The closest Uticans get is the Starbucks coffee served in the Barnes & Noble bookstore at a mall in the richest suburb.
Two hours east of Utica in Saratoga Springs, there is an historic racetrack. It was the summer playground of folks with last names like Whitney and Vanderbilt. Median family income: $60,000 a year. A Starbucks is in the middle of downtown on Broadway, the main street.
Go to the Starbucks Web site and see if its local stores are in the richer parts of your community. If you don't have a Starbucks, that tells you a lot, too.
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