Photo by Qfamily via Flickr Creative Commons
Is this a match for Starbucks in California?
There haven't been any actual Dunkin' Donuts stores in California since the 1990s, but that's all about to change. This isn't you father's Dunkin' Donuts. This is a whole new, amped-up, recently IPO'd and private-equity enabled Dunkin' Donuts. Not a cheerful place to stop in for a delicious coffee and and sticky ring of fried dough, but Starbucks worst nightmare.
Dunkin' Donuts, which has become something of a hipster alternative to 'Bucks, has almost no presence west of the Mississippi. However, following its $400 million initial public offering last year, it's putting itself under pressure to grow. Understandably, given that it's stock price has bumped along in a narrow trading range since its successful debut (it came out at $19 and has lived reliably above that ever since). But it's trading at 100 times earnings (not unusual for a newly IPO'd company), which means that investors are expecting this sucker to go someplace.
Starbucks re-opening, 2010.
Starbucks has gotten itself into the very definition of an awkward position, particularly in California. The coffee chain is being protested by an anti-gun group for looking the other way when practitioners of what's called "open carry" show up for meetings at Starbucks with their unloaded firearms.
Starbucks has said that it's just respecting the local laws. But there's speculation that 'Bucks is being used as a forum by the open-carry crowd to invite challenges to its rights (they're even come up with a gun-weilding Starbucks alterna-logo that probably horrifies Howard Schultz). And of course Starbucks' core demographic isn't as friendly to the Second Amendment as the core demo of the National Rifle Association.
So Starbucks has a business problem. Gun advocates and gun haters both like coffee. Why would you want to choose between groups?