Columbia's Independent Business Alliance represents Columbia's character in face of Starbucks - American Independent Business Alliance AMIBA

Coffee giant's arrival in Columbia gives some the jitters

ALAN SCHER ZAGIER

Associated Press

COLUMBIA, Mo. - On a gloriously warm late winter morning, the sidewalk cafe at the new downtown Starbucks, the city's first, is hopping.

Bearded professors deconstruct poetry verses next to iPod-wearing undergrads crunching equations. With a prime spot across from the University of Missouri-Columbia's revered journalism school, the corporate coffee giant looms large in this 90,000-resident college town.

Coffee is serious business here, with four local coffee houses within three blocks of the new Starbucks. Throw in the sandwich shops and restaurants with coffee on the menu and that number jumps to 14, by one local barista's estimate.

Yet the arrival of Starbucks means more than easy access to a white chocolate, half-decaf, low-fat latte.

Many small downtown merchants and their fiercely loyal customers perceive the Seattle-based corporation as a threat to the thriving, locally owned and independent business community that puts Columbia in the enviable position of laying claim to a vibrant downtown.

"They say one of the worst things to do is to take away someone's home," said Leigh Lockhart, owner of the Main Squeeze Natural Foods Cafe. "You don't want it to look like everywhere else."

Lockhart, whose cafe began a decade ago as a window-front crepe stand inside an adjacent coffee shop, joined other local business owners 16 months ago to create Columbia Locally Owned Retail and Services, or COLORS.

With nearly 90 participating businesses, membership has almost doubled in the past year, said Lockhart. Consumers who join COLORS receive discounts at participating stores.

National chains and their local franchises, from Subway and W.G. Grinders to Merle Norman Cosmetics, are nothing new in downtown Columbia.

But as interest in the area locals call "The District" increases, so do property taxes, and in short order, rent. Left on the outside are the struggling businesses that either must close or move to less desirable but more affordable locations.

"We have reached the point where we're on the radar screen," said Carrie Gartner, director of the Columbia Special Business District, a group of downtown business owners. "We've certainly arrived."

Gartner calls the infusion of chains downtown "a matter of balance."

"Chains come in and raise the standards," she said. "They're always reliable. They challenge independent businesses that don't have that level of quality control. It gives them something to strive for."

John Ott, a downtown property owner whose holdings include the building occupied by Starbucks, said his new tenant is making a positive impact.

"Whether they're local or corporate-owned, everyone is benefiting from Starbucks being here," he said.

Lakota Coffee Co. owner Skip DuCharme, who with 13 years under his belt is the granddaddy of downtown coffee shop owners, hopes the new corporate competitor will lure in novice coffee drinkers whom he can later cultivate as connoisseurs.

That view echoes a Starbucks spokeswoman who said the behemoth's presence "actually builds the business for smaller coffeehouses and companies."

A new report by Mintel International, a Chicago-based market research firm, supports the symbiotic theory. While the number of Starbucks in this country nearly tripled from 2000 to 2005, increasing from 2,776 to 7,551, the number of independent coffeehouses nationwide increased from 9,824 to 13,849, according to the group.

"Though Starbucks is shown as expanding faster than the overall market, it has not necessarily done so at the expense of independent coffeehouses," the report states. "Because Starbucks' expansion has driven adoption of premium coffee into the zeitgeist and created new demand for the product, it has opened the market up for competitors as well."

Still, such mutual growth is a "mixed blessing," the Mintel report concludes, because Starbucks' overall market share increased from 67.9 percent to 73.3 percent over that same five-year period.

Lockhart, the promoter of locally owned businesses, has adopted a Darwinian outlook when it comes to the looming presence of national competitors.

"The strong ones will survive," she said. "You can't cry in your independent, locally owned soup if you have a business that doesn't succeed. Small businesses have to be better."

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