HOUSTON -- For thousands of Houston residents, a daily trip to Starbucks is automatic. And it's not just the coffee that makes it so easy. They are virtually everywhere. Starbucks baristas are making drinks at 283 local spots.
But that wasn't always the case. Once upon a time, there was only one Starbucks in town. It was at Highland Village, and 13 years ago last month, it opened its doors, according to a report in the Houston Chronicle.
Starbucks took off in Houston and around the world by consistently delivering a small [image-nocss] taste of luxury in a comfortable, stylish setting, analysts say. And though it's no longer the darling of Wall Street, the Seattle-based company still has its loyal multitudes.
On the first day it opened in Houston, there was a line of customers waiting for it to open at 6 a.m., recalled Jean Manning, Houston's first Starbucks manager and currently the company's regional director for south Houston.
"It was packed," she told the newspaper. "We had no idea what to expect, but products would blow off the shelves. It was amazing."
About half of the customers knew exactly what they wanted and the rest were there to learn, she said.
The store gave away tumblers carrying the message: "Starbucks Coffee: Waking up Houston."
Starbucks chose the Highland Village location first because of its high visibility, heavy traffic flow on Westheimer and surrounding high-end retail, said Kim Castillo, the company's regional marketing manager.
Manning joined Starbucks after answering a newspaper ad. Previously, she managed a KFC in Sugar Land, Texas.
On the Highland Village location's first day, the selections were similar to what they are now but more limited.
Five days after the first store opened, the Galleria store followed, and in another 11 days the Westheimer/Fountainview store made its debut.
In February of 1995, after a fourth location opened, it was announced that Starbucks CEO Howard Schultz would visit the Houston stores for the first time.
On the night he arrived, around 1 a.m., a motorist plowed into the Westheimer/Fountainview store, causing significant damage. "We joked that it was our first drive-thru," Castillo said. Schultz wasn't taken to that store. It was repaired a day later.
Also in 1994, Starbucks opened its first stores in Minneapolis, New York City, Atlanta, Dallas and Boston.
It didn't take long for Starbucks to infiltrate Houston. In five years there were 33 stores, and 86 in a decade.
Today there are 145 Starbucks stores, 138 more licensed Starbucks locations with baristas at places such as bookstores and Targets, and another 356 food-service accounts, such as hospitals and hotels, where Starbucks coffee is poured. All Starbucks stores are company-owned.
Starbucks exploded here and everywhere because "they're the single-greatest example of developing customer loyalty, and they're constantly bringing in new products," said Chris Tripoli, president of A'la Carte Foodservice Consulting Group.
More than product, however, it's about consumers need to have a convenient place to meetwomen after they drop off their kids, students doing homework and professionals holding meetings, he said.
"Starbucks is master of accessible luxury," by creating a luxury experience through their consistency, branding and service, said Kit Yarrow, a business and psychology professor at Golden Gate University in San Francisco.
"Coffee has long been the ultimate social glue," Yarrow said, and in the case of Starbucks, it's "an individually crafted cup of special coffee."
The phenomenal success of Starbucks has spawned an anti-Starbucks culture of coffee drinkers who believe the chain is too corporate, providing opportunity for independent coffeehouses to position themselves as an alternative.
Michael Binns, owner of 6-month-old Fioza, a coffee and tapioca tea house in the Meyerland area, maintained that his coffee is more flavorful than a cup of Starbucks and said his place has more of a neighborhood coffeehouse feel.
He gives credit to the Seattle-based chain, though.
"I don't think we would have the instant respect we had without Starbucks," Binns said. "It would be a much harder sell. They brought gourmet coffee into the mainstream."
Lately, however, Starbucks has been feeling the heat. After booming sales growth for so many years, the company has seen its stock decline in value. By midmonth, the company's share price was down more than 40% for the year.
For the first time, Starbucks has major competition in designer coffee from McDonald's and Dunkin' Donuts, said Howard Davidowitz, chairman of Davidowitz & Associates, a national retail consulting and investment banking firm in New York City.
"Will its core customer stay with Starbucks? Absolutely. But it's losing a small percentage to competitors, and that's affecting the stock price," he said.
Starbucks' growth opportunities are less than they were in the past, Davidowitz said, "but it's still a cash machine and one of the greatest American brands in retail history. It's still going to be a great company."Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.