Starbucks Coffee losing steam in Puerto Rico

Either our economy is much worse than anyone is actually saying or Starbucks Coffee is guilty of over-zealous expansion, because this week they announced that they would be closing three stores. According to a report from the Forbes web site, the stores will be closed in June, and all of the employees would be transferred to other stores.

Although the Chicken Little in me wants to say it's the former, I have to be honest and say that it's probably a little bit of both. As I've said before, Starbucks growth in Puerto Rico has been surprising for many people, but of course, if you've traveled to any major city in the Unites States it isn't that much of a surprise. In the heart of most cities like New York, Boston, or Portland, you'll commonly find what seems like a Starbucks on every other corner. Of course, much like when I predicted that Macy's wouldn't do well here in Puerto Rico, what people missed is that it was never about the coffee (just as I missed that Macy's was never about their merchandise). What Starbucks offered was a unique experience unmatched in the marketplace. It made you feel special when you finally figured out how to order what you wanted; you joined an exclusive group that made you feel superior to those that were clueless (just as some believe when they are walking around with a Macy's bag in their hand).

According to Starbucks spokesman in Puerto Rico, Adolfo Santana, the stores struggled financially because they were too close to other Starbucks locations. There's probably some truth to that, but I think when Outback, Ruby Tuesdays, and TGIFridays are also closing stores, the poor economy has to be equally responsible. The conclusion: for this market Starbucks may have reached its limit, especially in the San Juan metroplex.

What will be curious to see is if they continue with plans to open additional stores in other locations. If you check our map of Starbucks locations, there are at least three locations that I would open if I were Starbucks. The locations, in this order of priority, are: Mayagüez, Ponce, and Aguadilla or Arecibo.

Flickr Creative Commons Contributor: hlkljgk