Retail

24/7 Wall St. Starbucks Store Evaluation Tour Heads to Texas

Peter Lynch encourages investors to look at what they use and what they know for investing, and Starbucks (SBUX-NASDAQ) has become one of the largest household names out there. 24/7 Wall St. is reviewing numerous locations between the rush hours of 7:30 AM and 8:30 AM local time in numerous cities throughout the country putting the Peter Lynch methods to test and to see if the company’s growth plans will be as successful as the company hopes. 

This morning was an interesting Starbucks store evaluation because this is the dueling Starbucks’ in Houston, where the company has two stores across the street from each other at the intersection of West Gray and Shepherd in Houston, Texas in an area that is definitely more affluent.  While these are both Starbucks and while they are within about 150 feet of each other, they are quite different inside-out. 

The store at the northeast side of Gray & Shepherd (2050 W. Gray) is an in-and-out location.  This is true from the drive-thru to the inside layout of the store itself.  Visit time was 7:45 AM Central Time (4/18/07)

Overall Ratings (1 to 3, 3 being best)   Wait Time – 3, Cleanliness – 2, Bathrooms – 3, Space – 3, Personnel – 3, Inventory – 2, Ambience – 2.

The wait times were fast at only 2 minutes flat with 5 people ahead ofme in line, so they get a 3 (best) rating. The cleanliness of the storewas ample, not great and far from, deserving of a 2.  The toilets weremore spacious and less cramped in feeling and were actually quiteclean, deserving a 3 for best there.  The space is a 3 (best) ratingfor space per person.  You won’t have to whisper in anyone’s ear tokeep your closest 10 seated guests from giving you advice on yourconversations.  The personnel here is pleasant and efficient, and evensome longer-term workers that have been there, so they actually get a3.  They are very efficient when you consider they manage a drive-thruand still got me (and everyone else) ordered and served with a smile.

Overall inventories here were good with a 2 rating, except they aren’ttrying for the mass “Starbucks Merchandise” sales that some of thestores go for. There were enough food and “other” consumables to pickfrom with none of the refrigerated racks being stuffed or bare.Ambience here is a 2 for average-good, with more good than bad.  Itseats 30 inside, but besides the 4 oversized chairs the furniture ismore of the fragile basic wood-metal.  It may be spacious for personalspace, but if you weren’t paying attention you would not ever give thespace a thought. 

Starbucks on the southeast side of Gray & Shepherd (2029 W. Gray): Time of visit 8:00 AM Central Time (4/18/07).

Overall Ratings (1 to 3, 3 being best): Wait Time – 3, Cleanliness – 2,Bathrooms – 1, Space – 2, Personnel – 2, Inventory – 3, Ambience – 2

These guys get a 3(best) rating here on wait times because there were 6people in front of me when I walked in the line and my walk-in time toorder was only 2 minutes and 10 seconds.  What was impressive is that 3of the 6 in front of me orders the fru-fru drinks that take longer toorder and ring up than the basic coffee.  The store gets a 2 oncleanliness.  It wasn’t spotless and it wasn’t dirty.  They could workon the sit-up counters at the windows but it wasn’t a problem.  I wouldhave only said a 2 for mediocre in the bathroom, but circumstantiallythey are getting a 1 here.  The person that came out of the bathroomright ahead of me was a Starbucks employee and there were still waddedup paper towels on the floor and the area just wasn’t clean.  It is notan atrocious 1, but it is a 1 rating since the effort was lacking rightthere on the spot.

The space here is hip with darker woods and more “StarbucksMerchandise,” although it is pretty compact.  This is the one wherecustomers stop by and would stay longer, although the seating is a tadless at 24 inside, but its outside seating is good for nearly doublingthat capacity.  All in all this location gets a 2 on its entire space.The personnel gets a 2 rating for average.  They were not unpleasant atall, but they weren’t the ones you get a hi-five from.  They werebetter at efficiency and speed than personality, but for a coffee spotit was fine.  Inventory was full to well-stocked on everythingdesserving a 3, although some obvious improvements can be made.  Thenewspapers are off to the side away from the order line, some of theshelf and bin merchandise was as orderly as some would want, but all inall if it was something besides coffee drinks they had it and had mostfairly close to the register.  Ambience is average at a 2, although itwas more positives inside the floor area than negatives. The criticismof Starbucks keeping their Wi-Fi tied to T-Mobile subscribers is onethat needs to change, at least if they want people to stay in theirstores for business meetings where they may buy twice. 

After reviewing both stores there is nothing that would make peoplestay away, even though there is room for improvement.  Here is thefirst reviews in or around NYC and here is the first reviews in San Diego.

Jon C. Ogg
April 18, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

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