The Reverse Starbucks Effect

Some years ago I wrote about the so-called “Starbucks Effect.” discovered when economists had crunched some numbers and found that houses located near a Starbucks coffee shop appreciated more than houses far away from the nearest Starbucks. The open question was whether the finding was the result of causation–i.e., that the decision to locate a Starbucks caused house prices to climb–or simple correlation.

Now, perhaps, we’ll get to see if there is a reverse “Starbucks Effect,” because the ubiquitous coffee chain is closing 16 stores–one in Washington, D.C., one in central Philadelphia, six in the Seattle area, six in the Los Angeles area, and two in Portland–because of personal safety concerns reported by employees. Many of the safety concerns, set forth in “incident reports” Starbucks employees submitted to the company, apparently involve drug use issues and encounters with customers and the general public.

A news article in the Philadelphia Inquirer about the closure of the Philadelphia location reports that the Starbucks and other businesses in the Center City District had persistent problems with drug users in bathrooms, and that Starbucks has changed its policies to empower store employees to close restrooms and even entire stores in response to safety concerns. The Inquirer article noted that the drug use problem at the Philadelphia Starbucks was so significant that the store installed blue light bulbs in the bathroom, which are supposed to deter intravenous drug use by making veins less visible, In addition, the article reported that the store was the source of a number of “calls for service” to the Philadelphia police, primarily for individuals fighting.

It’s sad to think that coffee shops have become such unsafe spaces in some cities, but you can’t blame Starbucks for closing locations where there is a pattern of safety concerns that raise obvious liability risks. And you also have to wonder how people in the neighborhoods where the Starbucks stores are closing feel about the decision. What kind of message does it send if your area is deemed too unsafe for a Starbucks?

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