Monday, October 19, 2015

REWE and Starbucks?

Today's business news in Germany had this one odd piece.....REWE the supermarket chain (3,000 stores across Germany)....will begin in 2016 to bring Starbucks into supermarkets.  Note, the comment spoken was metropolitan areas where the stores are located.  So it seems that we aren't talking about all of the REWE shops.....but they didn't exactly want to spell out the number of REWE shops where it might occur.

Just reference sake.....I went back and looked up how many Starbucks are operating in Germany today.  It's listed at 159 shops.

While living and working in Washington DC.....I used Starbucks on a number of occasions.  From the standpoint of four-star coffee....they do a great job.  My preference was for their green tee.....which was also a great job. I should note......nothing is really cheap when you stop at Starbucks.  It's a fair amount that you might pay but it's way above what you'd find at most coffee shops in terms of quality.....at least in the US.

Here in Germany?  Well....here's the thing, from an American who has had a fair amount of coffee (Wiesbaden, Mainz, Frankfurt, Berlin, etc).....Germans know how to brew four-star coffee for less than what Starbucks charges.

I can point out a dozen-odd shops in Wiesbaden alone that I might stop and buy a coffee and it's as good as what Starbucks can handle.

The one slam I can offer against Starbucks is that they have this small listing of gourmet-like snacks to go with the coffee....that usually cost a fair chunk of money.  At a German shop....I can smile as I pick out some cheesecake or French brotchen, and pay generally less.  Knowing the variety of options....I just can't think of anything that I'd want to snack on....while drinking the Starbucks coffee.

Where does this go?  My humble guess is that REWE will probably move Starbucks into a hundred-odd stores which are all in mid-town areas.  In Wiesbaden, my guess is that three Starbucks will be pushed into REWE operations.  I can think of two REWE locations in Mainz where there is enough foot-traffic to make it potentially profitable.  The question is.....will a guy be willing to stop at REWE for his coffee and buy premium Starbucks coffee on a regular basis?

My hunch is no.

The one place where you'd think a Starbucks would open....would be the Wiesbaden Bahnhof.  There's at least four bakery operations in the station....which all do a fair amount of business in the morning.  The thing is.....Starbucks wants coffee operations running around the clock.....morning, afternoon, and evening.  And Germans just aren't that type of coffee drinker.

Maybe in five years....two hundred Starbucks will have come out of this relationship with REWE and some acceptance by the younger generation for round-the-clock coffee consumption.  But I have doubts that anyone will be proclaiming fantastic success out of this deal.

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