Starbucks: 1 Store = $1 Million Investment and GIS Helps Get It Right

Rob Sopkin, the Vice President of  Store Development – East for Starbucks provided and overview of the company's utilization of geospatial information for site selection. "Every decision about opening a store is about a $1 Million investment for Starbucks," said Sopkin. At the height of Starbuck's growth there were opening 800 stores per year. But while you would think that a few underperforming stores wouldn't be a big deal, Sopkin said that one poor decision will negate five good decisions. "Site selection is often a mix of art and science; a combination of strategy and opportunity," said Sopking

Starbucks is using Esri's Business Analyst Online to address a need for better efficiency by Store Development Managers (SDM).  Sopkin said that his real estate site packages are full of information with many assumptions that need to be checked. He relies on the ability to challenge his SDMs to test different scenarios to better qualify opportunities and ascertain whether the original  assumptions are correct.

During the economic downturn, Starbucks went through a period that saw many underperforming outlets. It necessitated the closing of 800 locations.  Sopkin and his team did numerous "post mortems" on stores and looked at the original site packages to challenge assumptions on the original decision. Did they have a solid scientific assumption?  Sopkin now provides iPads to all SDMs so they can check and recheck assumptions with timely demographic and other location intelligence data.

Published Monday, July 23rd, 2012

Written by Joe Francica

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