24/7 Wall St. Insights

• Arsonists attacked a new Starbucks Corp. (NASDAQ: SBUX) store in Taos, New Mexico.
• Also: 2 Dividend Legends to Hold Forever.

What appears to be arson attacks have burned down a Starbucks Corp. (NASDAQ: SBUX) store in Taos, New Mexico. The location, called “Charbucks,” is not entirely built; it would be the first drive-through Starbucks location in the area. Reuters was the first to report on the problem. The arson may be because some residents don’t want Starbucks in their town.

Reuters says, “Meanwhile, the building contractor from Albuquerque, the state’s largest city, has installed video cameras and a security guard sleeps at the site in a camouflage trailer.” The builder does not have many options because the arsonist could return. The new Starbucks CEO may have a problem.

According to the news service, the problem is not new. As Starbucks expanded into countries worldwide, they sometimes hurt traffic to other local coffee shops, or at least that is the impression. Whether it is true is another matter.

This kind of problem is not new. For decades, there was worry that Walmart Inc. (NYSE: WMT) would hurt traffic to local retailers. This has been particularly true with small grocery stores. According to Time Magazine, people who own their smaller stores can’t get the deals that Walmart gets from its suppliers in some parts of the country. This allows Walmart to charge lower prices.

If the history of large businesses in America is any guide, small companies attack bigger ones for monopolizing their sectors. This happens in the software and tech business as the government goes after companies like Alphabet. Does the same yardstick apply to Starbucks? That is anyone’s guess. Burning down stores doesn’t answer the question.

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