Photo: Starbucks
In some cities around the U.S., it seems as though the biggest competition any particular Starbucks store faces is another Starbucks down the street. In the future, there may be even more such scenarios based on an internal memo obtained by Yahoo Finance from Starbucks executive chairman Howard Schultz, which predicts that retail space will soon be cheaper to rent.
“We are at a major inflection point as landlords across the country will be forced (sooner than later) to permanently lower rent rates to adjust to the ‘new norm’ as a result of the acute shift (consumer behavior) away from brick and mortar retailing to e-commerce,” Mr. Schultz wrote, according to the report.
Lower rents come at a good time for Starbucks as the company has just opened the first of its high-end Reserve stores that include pricier coffee, cocktails and Italian baked goods and other foods. The first Reserve store is in Starbucks’ headquarters building in Seattle with others planned for Chicago, New York, Milan and Tokyo over the next two years.
The Reserve store, according to a Seattle Times report, is the fulfillment of Starbucks’ “third place” concept where people have a place to be together outside of home and work.
“We want to be a part of the community and are looking forward to being a stop on the way to sporting events, on the way to theater, on the way to concerts,” Shauna McKenzie-Lee, director of operations for Starbucks’ Siren Retail line, told The Seattle Times.