24/7 Wall St. Starbucks Store Evaluation Tour

Peter Lynch, who had one of the great investment track records while at Fidelity once made this point:  "An amateur investor can pick tomorrow’s big winners by paying attention to new developments at the workplace, the mall, the auto showrooms, the restaurants, or anywhere a promising new enterprise makes its debut."

And  Howard Schultz, the founder of Starbucks (SBUX), recently wrote to his management: "Over the past ten years, in order to achieve the growth, development, and scale necessary to go from less than 1,000 stores to 13,000 stores and beyond, we have had to make a series of decisions that, in retrospect, have lead to the watering down of the Starbucks experience, and, what some might call the commoditization of our brand." 

24/7 Wall St. is setting out to test the Lynch investment approach, and to find out if Mr. Schultz does have a problem Our writers will visit at least one Starbucks a day at 7.30 AM to 8.30 AM local time. We will look at stores in over a dozen cities. Each outlet will be graded on the time it takes from getting in line until the order is delivered, cleanliness of the store, cleanliness of the bathroom, whether the store has adequate seating, the friendliness and professionalism of personnel, whether their is adequate inventory, and overall ambiance. Each of these will be grade 1 though 3, with 3 being the best score.

Starbucks at 96th and Madison Avenue, New York CIty. 8.20 AM, 4/16/2007. Wait time for order–2 minutes, 50 seconds. Cleanliness–3. Bathroom–2. Seating–3. Staff–2. Inventory–3. Ambiance–2. This store is on the corner of one of the busiest streets in this part of NYC. There is not much of a community feeling, but that may be due to the huge amount of foot traffic. Store was well stocked. The people working there overly busy. The bathroom needs a quick going over.

Weekend tour–visits Connecticut stores.

Westport Connecticut. Route 1, Post Road, off Exit 18 of I-95. 2.35 PM, 4/15/2007. Wait time for order–2 minutes, 25 seconds. Cleanliness–3. Bathroom–3. Seating–3. Staff–3. Inventory–3. Ambiance–3. This store is everything a Starbucks should be. The staff is friendly. The store is clean and well-stocked. Customers were enjoying themselves.

Ridgefield, CT. 90 Commerce Park. 4/14/2007. Wait time for order: 5 minutes, 15 seconds. Cleanliness–1. Bathroom–2. Seating–1. Staffing–2. Inventory–2. Ambiance–1. If the company is not careful, this is where Starbucks locations are headed. The store had a dirty feel especially the floors and furniture. The staff seemed primarily interested in rushing people in and out, but the service was slow.

Douglas A. McIntyre can be reached at [email protected].