Full steam ahead
Even in an economy on ice, ubiquitous chain scours city for new locations Starbucks opens 12 to 15 stores annually in Oregon and Southwest Washington
The Sandwich Experience at Northeast Broadway and Grand Avenue is about to become a Starbucks experience.
Sometime this summer, the ubiquitous Seattle-based chain will open yet another coffeehouse in the space occupied by the now-closed drive-in restaurant.
The location has everything a Starbucks could want Ñ convenience, access and visibility, said Craig Sweitzer, principal of Urban Works Real Estate, who has been finding locations and negotiating leasing contracts for Starbucks in Portland and Southwest Washington for 11 years.
The chain has been trying to get the Sandwich site for a long time, Sweitzer said. 'The goal, he said, is to put a Starbucks 'where it is easy to stop and where customers want it. At this point, we're looking at every location in the city. Our biggest problem is finding enough sites.'
You might think that with 101 retail locations in the four-county Portland area, and another 48 licensed inside grocery stores and other businesses, Starbucks would be slowing down.
But the chain Ñ which has more than 6,500 outlets worldwide Ñ hasn't yet quenched the public's thirst for lattes, Frappuccinos and a seemingly endless number of specialty drinks.
In fact, Sweitzer said, Starbucks has paved the way for other specialty-coffee outlets.
While the sputtering economy has dampened sales and growth for many chains Ñ even McDonald's is taking a beating Ñ it hasn't stopped Sweitzer from continuing to scour the area for new locations.
Besides the Broadway and Grand location, a Starbucks is planned for the Barbur Shops, a complex of stores and offices at the intersection of Barbur Boulevard and Terwilliger Street in Southwest Portland. It will occupy the development's very visible 'marquee' corner.
A free-standing Starbucks is planned for the Oregon Trail Shopping Center in Gresham. And Sweitzer is looking at a site just south of the Broadway and Grand location that is 'equally as good,' he said.
On average, Starbucks opens about 12 to 15 stores a year in Oregon and Southwest Washington, he said.
Acquiring the targets
In deciding where to put a new Starbucks, Sweitzer relies on neighborhood demographics, traffic patterns (both vehicle and pedestrian) and visibility.
'We look to see if (a site) is on the 'going-to-work' side of the street,' he said. 'We look at corner locations, the types of retailers around us and the demographics.'
Neighborhood income may have been a factor when Starbucks first expanded, but the company found that it has little to do with a store's success. 'Everyone drinks coffee,' he said.
As a real estate broker, Sweitzer keeps track of when potential locations become available.
'Starbucks people come down from Seattle, we go to the site location, drive it, get a feel for the neighborhood,' he said. 'There are only so many intersections or shopping centers that are primary. It's a process of elimination.'
For those who wonder why some neighborhoods seemingly have a Starbucks on every block, Sweitzer says it's because an existing store gets so busy, it can't serve customers fast enough.
The rate of service depends on the location, said Martha Nielsen, Starbucks' regional marketing manager for Oregon and Southwest Washington.
'But if a line is out the door, is this the best experience you want?' she said. 'Maybe it's time to look for some other real estate.'
Sweitzer said cost also is a factor in locating a Starbucks, especially if a site has to be rehabilitated first. Though he would not say how much it costs to start a Starbucks, he said the average store is about 1,500 square feet, and the average monthly rent for a Portland storefront is about $20 per square foot.
'Add costs for employees, equipment and supplies, and costs start to add up,' he said.
North and Northeast Portland neighborhoods, which have about a half-dozen Starbucks between them, have been challenging, particularly on Martin Luther King Jr. Blvd., Sweitzer said.
'We are always looking for the right opportunity on MLK,' he said. 'There are not a lot of traditional storefront locations along MLK. The median down the center of the roadway makes access difficult from either side, and the stores have to be convenient.'
Starbucks did open an outlet recently near the Oregon Convention Center on MLK, he noted.
Because Starbucks stores are so widespread, the company has been targeted by critics as a symbol of corporate America gone amok. Still, the chain remains popular, as the number of new openings attests.
'Starbucks isn't a fast-food operation, and that has a lot to do with it,' Sweitzer said. 'McDonald's usually puts in a drive-through, and that tends to break down a neighborhood. Starbucks doesn't create a barrier but tries to be a 'third place,' a gathering spot for people.'
This doesn't mean that Starbucks won't open a drive-through.
'We have quite a few in development, mostly for highway locations or in fast-food zones for a particular shopping center,' Sweitzer said.
A drive-through in Vancouver, Wash., at the intersection of Interstate 205 and Mill Plain Avenue, has done very well, he said.
Except for a Starbucks service counter in the Multnomah County Library that closed, Sweitzer could not remember any Portland outlet that did not succeed.
He speculated that the library location was difficult because of the facility's schedule. Business depended on library usage, 'and only so many people use the library,' he said.