National Chains and Neighborhood Coffee Shops Threatens Starbucks’ Supremacy

Starbucks announces plans to slim and trim approx. 150 underperforming stores in 2019 particularly in urban markets in order to optimize their existing store base! This is a case of opening up stores too close together also known as “cannibalization”. Starbucks is still the 800-pound gorilla but is facing growing competition from trendy, independent neighborhood coffee shops. Starbucks will continue to expand, primarily by shifting their focus from urban to suburban in order to capitalize on underpenetrated markets. This will allow Starbucks the opportunity to gain quick market share and where they can be the only real game in town.

The chain to watch is JAB Holdings. This company owns lots of coffee assets with include Caribou, Einstein Bagels, Peet’s, Stumptown, Intelligentsia and Panera. Into the future, they could position themselves to become a potent competitor to Starbucks in the future.

Did you know that Starbucks holds the market share of US coffee chains at 39%, followed by Dunkin Donuts at 22% and other small players at 38-40%?

Starbucks has 28,000 locations worldwide with plans to open 3,400 new stores in the US and 12,000 new stores globally by 2021, focusing heavily on the Asian markets including China. Dunkin Donuts has 9,000 US locations with plans to approx. 1,000 by 2020.

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