Established 1826 — Oldest College Newspaper West of the Alleghenies

Starbucks chain experiences sales slump

Miami junior Ali Falcon sips on coffee at Starbucks uptown.
Miami junior Ali Falcon sips on coffee at Starbucks uptown.

Miami junior Ali Falcon sips on coffee at Starbucks uptown. (Michael Pickering)

Coffee drinkers may find themselves waiting in shorter lines at Starbucks locations across the country, with the company reporting that their business is down in 14 different states.

Abby Hirt, account associate at Starbucks' public relations firm, said that this down period is due to a "leveling off period" for the company. She would not say what is causing the decrease in sales, but did note that it is something that has been taking place recently.

Ohio is one of the 14 states Hirt identified as experiencing this sales decline.

While Hirt would not address sales at Oxford's Starbucks location, she did say that it fit in with the larger trend.

"These Starbucks locations through 14 different states have had the same issue, it is not just specific to Oxford," Hirt said.

In addition to the larger "leveling-off" period, the Starbucks uptown has been facing increased competition in Oxford this academic year with the opening of King Cafe, which is located in the basement of King Library on Miami University's campus and serves many of the same beverages as Starbucks.

The uptown Starbucks has been open since 2001, while King Café opened in mid-November 2006. Just a five-minute walk apart, the two locations inevitably vie for a similar pool of local coffee drinkers.

King Cafe brews Starbucks coffee and other specialty beverages that are slight variations of the Starbucks brand. Because of trademark issues, the cafe sells Creamices instead of Frappucinos.

The cafe is not a Starbucks franchise, but rather a "We Proudly Brew" operation. These locations are found across the country at airports, hotels and universities. Starbucks employees train the staff at these locations, said Teresa Baker, general manager at King Cafe.

Housing and dining at Miami University has a license with Starbucks and buys their products, which are used at King Cafe as well as the five buffet dining locations on campus; Marcum Conference Center and Inn; and at the Miami concessions at Goggin Ice Arena, Millett and Yaeger Stadium, according to Baker.

Enjoy what you're reading?
Signup for our newsletter

"We buy and sell Starbucks products as we have been for the past three school years," Baker said. "We don't pay royalties for products sold under our licensing agreement, but I am sure they make money off the products they sell us as do our other suppliers."

Baker also said that the connection between King Cafe and Starbucks Coffee Company goes beyond the financial aspects.

"We still have to go by Starbucks' standards of brewing and the way to make the coffee drinks. The same syrups are used and we sell a few special drink recipes," Baker said.

She said that business has been doing extremely well since its opening last year.

"In the beginning we were averaging about 1,000 patrons a day," Baker said. "By the end of last semester - after the word spread about us - that number reached 1,600 and now we're seeing up to 2,000 (customers) each day," Baker said.

The cafe has received a good deal of positive feedback from students since opening, Baker said. Students are happy with the comparable prices, the convenience and the adequate amount of space available for studying, according to Miami Expressions comment cards that have been submitted about the cafe.

Miami junior Molly Moorman said she chooses King Cafe because it accepts meal plans as a form of payment.

"The glory of using your swipe card versus pulling out the debit card is why I choose King Cafe," Moorman said. "Starbucks doesn't take meal plans or Uptown Bucks."

Others, however, are drawn to the ambience and variety of coffee drinks that the uptown Starbucks offers.

"I prefer to come uptown for Starbucks because I live off campus and I work uptown. The selection and taste is better there and the service is quicker," said senior Kraig Buesch.

Moorman said she agreed.

"I prefer the convenience of the library, but in relation to the taste, variety of options, and ambiance, I enjoy the starbucks uptown. The late hours are an added bonus as well as the intimate setting," Moorman said.

Employees at Starbucks uptown declined to comment on whether competition with King Cafe has affected their business. Kelly Hand, regional marketing specialist for Starbucks Coffee Company, said that the addition of another location simply helps the company better serve its customers.

"Our customers have told us how happy they are that they've got a second choice when they want their favorite Starbucks beverage," Hand said. "We're constantly on the lookout for opportunities to serve our customers in the places where they expect to find great coffee."