Starbucks Store Review in Texas

The Starbucks at the busy intersection of Westheimer and Post Oak Boulevard, is perhaps the largest Starbucks in Houston and has to be larger than 99% of all other stores.  This is actually on the outbound traffic if you are using the city map, but it is in a busy enough area that the direction of traffic is close to equal at most times of the day.  I went in at 7:40 AM on Thursday May 3, 2007.  This was not run yesterday ahead of earnings for obvious reasons.

This Starbucks is supposed to be one of the more hip locations located caddy-corner from the Galleria Shopping Center, but they could do a few simple things that would make a major improvement.  We have been using the Peter Lynch method of evaluating products you know and use for investment potentials and Starbucks (SBUX-NASDAQ) iss something many use. 

We have rankings for each category in a 1, 2, or 3 (with 3 being the best).  Here are the 1-3 ratings for the store: Wait -1; Cleanliness – 2; Toilet – 2; Space – 3; Personnel – 1; Inventory – 2; Ambiance – 3.

For this being perhaps a flagship location, the criteria is a little tougher.  The truth is that nothing was horrible, but they need to improve things at the flagship large stores like this. The line was 8 people in front of me and the wait time was a few seconds short of 5 minutes.  The 5-Minute wait is not a total killer, but the employees were just standing around and causing a delay.  In fact, upon leaving the store the line was 12 deep.  For starters every single employee there was “task oriented” and as slow as many postal workers.  There were no smiles, no peppiness, there were yawns, and lots of people looking over what seemed to be a work schedule time chart.  The good news is that no one was rude or sassy, but it was still disappointing.  The merchandise was decent on the sandwiches and cold drinks, but everything was set back too far and too low to easily see.  There were also some empty racks on the baked goods.  The store merchandise was mostly placed fairly well, although once again the newspaper rack was too far away from the counter area; yet there was only 1 copy of the NY Times. 

The space is massive so you aren’t on top of anyone and the seating area is both hip and larger than almost all stores by far.  The John was clean for what the store had to work with, but for a store of this size it needs to be larger and needs to be redone because of the obvious wear and tear.  The ambiance inside is very nice for its hip design with a circular “inner sanctum” theme. All in all it was fairly clean, but there was still the litany of unattended coffees and condiments on many tables and the service area.

Stay tuned for a short synopsis of our entire reviews.  Later today we will be running an actual evaluation of what the company can do from here to improve itself and hopefully make enough of an addition that may add to the bottom line.  Even though we all use their products, we do not own the stock and aren’t being compensated in any manner to hold the company in any light. 

Jon C. Ogg
May 4, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in any of the companies he covers.