Where the Starbucks Bubble Busted

Remember the heady days of 2005, when we thought that people could own homes without having any money and we thought that every block could support a Starbucks?
by | July 21, 2008

Remember the heady days of 2005, when we thought that people could own homes without having any money and we thought that every block could support a Starbucks? Back then, I blogged about government officials in Prince George's County, Maryland who were upset about the lack of Starbucks stores in their jurisdiction. Here's what I wrote:

Economic development officials in Prince Georges are none too happy about the Starbucks scarcity in their jurisdiction and there's a logic to their outrage.  Starbucks may send a signal to consumers that an area is trendy and upscale, while it likely tells entrepreneurs that wealthy spendthrifts frequent the area (who else would spend $3.50 for a cup of coffee?)  Thus, one can plausibly argue that Starbucks stores attract both businesses and consumers, thereby promoting economic growth.  Of course, it's just as plausible that Starbucks stores reflect, rather than promote, economic vitality.

Well, it wasn't just the housing bubble that burst. The Starbucks bubble burst too, which is why the company has announced the closing of 600 of its American stores (PDF). Given my musings about Starbucks and economic development, I have to think there's something significant about the places where the stores closed, although I'm not sure what.

Anyways, I calculated the per capita Starbucks closings in each state. Here are a few observations and then the full list.

-The five states with most closings per capita were Nevada, North Dakota, Minnesota, Oklahoma and Nebraska. Apparently, Starbucks wasn't a hit on the plains.

-In Minnesota, strangely enough, Minneapolis and St. Paul are only losing one Starbucks apiece, even though the state is losing 27. Coon Rapids is losing three by itself. Then again, maybe that isn't so strange. Does "Coon Rapids" sound like a place where people would drink Starbucks?

-Some other big cities also avoided many closings, but not Las Vegas, where 13 stores are closing. Las Vegas, of course, has been hit quite a bit harder in the housing bust than most places.

-Six states had no closings: Alaska, Montana, Rhode Island, South Dakota, Vermont and Wyoming. On that note, it's worth remembering that you have to have a Starbucks to lose a Starbucks.

-Beyond those six, the states with the fewest closings per capita were Arizona, South Carolina, West Virginia, New Jersey and Virginia. I'm not sure whether those states have anything in common.

-Seattle, the birthplace of Starbucks, lost seven stores, which is a big reason why Washington was 10th highest in closures. As someone who wandered the streets of Seattle earlier this year in search of a place to get a burrito and ran across eight Starbucks stores before I found one, I must say that's a welcome development. Seattle, get some Qdobas or, failing that, some Chipotles.

- If you doubt that Starbucks remains a cultural phenomenon, consider this actual headline: "No Dayton-area Starbucks to be closed".

State Closings per million residents

Nevada 7.02 North Dakota 6.25 Minnesota 5.19 Oklahoma 4.15 Nebraska 3.94 Hawaii 3.90 Indiana 3.62 Florida 3.23 Louisiana 3.03 Washington 2.94 Missouri 2.89 Arkansas 2.82 Alabama 2.59 California 2.41 Mississippi 2.40 Texas 2.38 Iowa 2.34 Maryland 2.14 Tennessee 2.11 New Mexico 2.03 New York 1.97 Illinois 1.95 Colorado 1.85 Michigan 1.79 District of Columbia 1.70 Pennsylvania 1.69 Oregon 1.60 Maine 1.52 Utah 1.51 Connecticut 1.43 Georgia 1.36 Idaho 1.33 Kentucky 1.18 Delaware 1.16 North Carolina 1.10 Massachusetts 1.09 Kansas 1.08 Wisconsin 1.07 Ohio 0.78 New Hampshire 0.76 Virginia 0.65 New Jersey 0.58 West Virginia 0.55 South Carolina 0.23 Arizona 0.16 Alaska 0.00 Montana 0.00 Rhode Island 0.00 South Dakota 0.00 Vermont 0.00 Wyoming 0.00

Josh Goodman
Josh Goodman | Former Staff Writer | mailbox@governing.com