Steven E.F. Brown
May 7, 2014
San Francisco Business Times
An empty storefront in San Francisco’s financial district, once a Starbucks shop just 32 paces from another Starbucks, will soon house yet another coffeehouse.
A cafe named “Espressamente,” serving coffee by Italian brand Illycafè S.p.A., will open, according to new signs posted, this fall.
The shop, at 123 Battery St., was one of those apocryphal places, though not apocryphal in this case, where one Starbucks was within spitting distance of another. A third Starbucks was just down the block at Pine and Battery, but it also closed and was replaced by several other food businesses.
Right across the street from it, at 295 California, was, and still is, another Starbucks. The Seattle coffee company (NASDAQ: SBUX) closed the smaller shop two years ago as it scaled back from what many people saw as its overweening imperialistic pride. Hundreds of Starbucks stores were closed down in that period, including, ironically, the one closest to the original Berkeley Peet’s Coffee & Tea (NASDAQ: PEET) shop started by Alfred Peet in 1966.
The history of the two shops at the corner of Battery and California streets is a product of the curious economic, real estate and specific industry forces that act on coffeeshops.
Starbucks was once famed for its real estate discipline — the company was said to carefully evaluate the foot traffic patterns at every potential store. It didn’t deliberately open two stores right across the street from each other in San Francisco, but it bought Torrefazione Italia in 2003 and picked up the 295 California location in that deal. That’s a busy and convivial corner spot, and Starbucks reflagged it with its own brand in 2005.
Though Starbucks didn’t deliberately open the two stores where they were, it was clearly willing to give the experiment a try, given the busy foot traffic in the neighborhood.
And the experiment lasted nearly four years. But at last, Starbucks shut down the smaller of the two shops, and the spot remained vacant since 2009.
Now, it seems, in the curious calculus of the coffeeshop business, another company is ready to give it a try.