Global coffee giant Starbucks has been getting a lot of bad press lately, first with how a Philadelphia location handled two black men who wanted to use the bathroom but refused to purchase anything and, secondly, with how the CEO handled the backlash. And now they’re getting hit with another blow.
Starbucks announced recently that they were going to close 150 of their U.S. locations, according to CNN Money. The closings are happening primarily in larger urban areas, but the company did not say if it had a connection with the bathroom incident or their new policy of letting anyone use the store bathrooms without a purchase — essentially turning all their locations into public restrooms.
However, outgoing Starbucks Howard Schultz said that mandatory anti-bias training that he forced tens of thousands of employees to take — even though the incident happened at one store — was very costly. In fact, it cost so much to close 8,000 locations for an afternoon training session that it severely ate into their marketing budget.
Starbucks’ new open-door policy has already worried some regular patrons concerned that bathrooms and tables will become overcrowded by people who are not visiting the coffee shop to drink any coffee. The company has also had to endure the bad press of hundreds of protesters calling them racist after the initial arrest of the two black men in Philadelphia.
Industry analyst Sara Senatore believes their sales are suffering because they aren’t offering enough healthy drink options to a more increasingly health-conscious urban populace, according to CBS News.
"Intensified competition in the slushy coffee category is exacerbating the shift towards health and wellness weighing on Frappuccino demand," she wrote. "Starbucks will focus on Teavana drinks and other more healthful options in its core offering, which it views as 'more differentiated.'"
Whatever the primary reason for Starbucks’ struggles, Coffee Bean & Tea Leaf CEO John Fuller believes it’s time for his company to invade their market. He spoke with CNN on Thursday about “Starbucks fatigue.”
“We just, a couple weeks ago, announced a 100-story development agreement with a new franchise partner in New York,” Fuller said.
Coffee Bean & Tea Leaf has a strong presence in southern California and hopes to expand across the country soon. Fuller also has locations in 31 other countries.