Success! Starbucks

Starbucks attracts a lot of criticism from the very people it serves as customers (and employs): generally the young, affluent, urban professional. Over 15,000 branches have opened since the first Starbucks opened its doors in Seattle, in 1971.



From modest beginnings, growth spurts took place in the 1980s and 1990s - under Howard Schulz - and by 2007 there were over 550 branches in the UK alone. Schulz has written up the Starbucks success story in Pour Your Heart Into It but coffee shops simply grew up in response to rising consumer affluence and the need for a comfortable place to drink higher quality coffee than the traditional bar or cafe. Competition for selling a good cup of coffee is most likely to come from McDonald's in future but Starbucks still envisages reaching 40,000 branches worldwide (including franchises) and will open 2,500 in 2008 alone.

Secrets of Success

• A cultured and female-friendly place to call in
• Global appeal: there are cafes and coffee drinkers everywhere
• Frappuccino and all the other innovations

Business Basics: Starbucks Corporation

• Seattle-based coffee shop specialist with over 15,000 branches worldwide (550
  in the UK)
• Revenues of $9.4bn in 2007, up 21%
• UK competitors led by Costa (Whitbread Group) and Caffe Nero

Success! JD Wetherspoon

Other companies may have lots more pubs but Wetherspoon goes for quality, not quantity. The founder, Tim Martin, continues to lead the way as Chairman of an estate now approaching 700 pubs. The pubs are large, often carved out of interesting old buildings, with an average annual turnover of more than £1m each.

The first Wetherspoon pubs were set up in the 1980s, long before legislation and changes in the beer market put a wedge between brewers and pub estates. Independent of the brewing industry, but very much involved in selling real ales, Wetherspoon has stuck to providing traditional elements of the pub - comfort, a warm welcome, reasonably priced beers of all types - while also adapting to a changing pub market. This has meant adapting to the ban on smoking but Wetherspoon was already shifting to a food model: by early 2008, over 30% of sales were coming from food, from 17% in 1998. Coffees and teas are also selling well.

Secrets of Success

• There's no need to change the traditional pub; tourists come here to drink in them
• Get the property basics right and you can sell anything
• Location, location, location

Business Basics: JD Wetherspoon plc

• Pub estate approaching 700 pubs (all company-managed) across Britain and Ireland


• Sales of £888m in 2007. Pre-tax profit £62m


• Competitors include Mitchells & Butlers, Punch Taverns, other managed pubs