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Monday, October 23, 2006

Starbucks: The Coffee House Becomes An Office (SBUX)

The Seattle Times floated an interesting theory. People use coffee shops and bookstores as offices. No overhead. Easy access to a cup of Joe and a sandwich. WiFi, too, for that matter.
And, what better place to meet a customer? Especially if you don’t have an impressive office. “Let’s just have coffee.”

A lot of theories floated in the press are full of steam and latte. But, this one may account for part of the success of Starbucks and the shops it has in bookstores like Borders.

Keeping an office can easily cost $1,000 a month, if not more. Phone, rent, reception. Heat. Big money.

With a subscription to T-Mobile and a cellphone, Starbucks provides a bathroom, a clean setting, and, some people simply think it is too cool. The fact that the company raised the price of a cub of coffee by $.05 notwithstanding.

Starbucks probably does not even know how many people use the company’s stores as “offices” and spend the better part of the day there.. But, it’s a good bet that they buy more than one cup of coffee.

Douglas A. McIntyre can be reached at He does not won securities in companies that he writes about.

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