The Starbucks effect on property values

[DarnDirtyApe]

Sure Tim's is busy, but that doesn't tell you much about which one is more successful. What's the throughput at each location? How about profit margins?

Also, hospital patrons tend to be skew older, sicker, and probably poorer than the overall population (because statistics show that poverty and poor health are correlated). Starbucks is popular with urban yuppies, hipsters, and other young-skewing demographics who tend not to be in hospital very often.

 

[RZ12]

Awful Reno at
Starbucks at Queens Quay and York. Aroma taking over Toronto good thing they have one opening up at new RBC down the street.

 

[spider]

Sure Tim's is busy, but that doesn't tell you much about which one is more successful. What's the throughput at each location? How about profit margins?

Also, hospital patrons tend to be skew older, sicker, and probably poorer than the overall population (because statistics show that poverty and poor health are correlated). Starbucks is popular with urban yuppies, hipsters, and other young-skewing demographics who tend not to be in hospital very often.

Except the customers are not the patients they are the visitors and staff, very few of whom are leaning on a cane. A casual survey of the parking facilities reveal a larger than normal incidence of high priced vehicles ( I have seen Bentleys, Ferraris and top of the line BMWs and Mercedes every day) and not much of a queue at the bus stop.

 

[nfitz]

Tim's blows the doors off of Starbucks, Tim's is lined up 10 deep and Starbucks is deserted all day long.

What are they buying though? I frequent the Tim's at St. Mike's when I'm there for a long haul - and it's the food I'm after, not the coffee!

Just an observation from a guy who prefers MacDonalds coffee.

That might be the first thing we've ever agreed on! A few years ago - perhaps a decade now, I ended up at a McDonald's while driving, in desperation for a coffee to stay awake - and well aware of how dreadful McDonald's coffee was. It must have shortly been after they changed it. I was shocked at how good it was!

... and not much of a queue at the bus stop.

Wouldn't most transit users just walk to the subway station next to the hospital?

 

[spider]

Wouldn't most transit users just walk to the subway station next to the hospital?

Yes, if they were travelling east or west. Many hours at a window that overlooks Sheppard and Leslie show fairly equal vehicular traffic on both streets at most times of the day. I don't know if the transit user ratio is directionally equivalent but why not?

 

[NorthYorkEd]

Aroma taking over Toronto good thing they have one opening up at new RBC down the street.

I like Aroma; they are opening one at North York centre soon, I believe.

The only location that has given me grief is the new one at Square One. Been there three times; three times a lacklustre ordering experience.

 

[Admiral Beez]

That might be the first thing we've ever agreed on! A few years ago - perhaps a decade now, I ended up at a McDonald's while driving, in desperation for a coffee to stay awake - and well aware of how dreadful McDonald's coffee was. It must have shortly been after they changed it. I was shocked at how good it was!

I'm also a McDs coffee fan. I discovered it at lunch one day when I wanted a burger and fries combo, but did not want a pop/soda with the natural or chemical sweetners and by previous experience the shakes just give one the trots (what the hell is in those?). So I ordered a coffee, and now whenever I order a McDs it's always with a black coffee.

As for Starbucks, when it opened on Parliament St. CT knew we'd made it as a gentrified hood.

 

[nfitz]

Yes, if they were travelling east or west. Many hours at a window that overlooks Sheppard and Leslie show fairly equal vehicular traffic on both streets at most times of the day. I don't know if the transit user ratio is directionally equivalent but why not?

Why not? The only north-south transit there is the 51 Leslie bus which only runs about once every 25 minutes off-peak. And only once every 14-15 minutes at peak. Compare to the subway that runs every 5.5 minutes for 21 hours a day.

I used to work near Leslie station. I'd normally use the 122 Graydon Hills, but sometimes I'd walk up Leslie to the subway or take the 51 Leslie bus. The Leslie bus wasn't that well used. I'd see far more people on the subway platform at Leslie (which was never empty) than at the bus stop for the much less frequent Leslie bus (seldom was there actually anyone standing at the stop).

It was pretty clear that most transit users who worked near Leslie station were taking the subway. This was also true 25 years ago pre-subway when I used to live near Yonge and work in an office right at Leslie/Sheppard. The Sheppard bus used to come every couple of minutes. And I don't think I was ever the only person standing at the bus stop, unlike on Leslie.

 

[James]

Sure Tim's is busy, but that doesn't tell you much about which one is more successful. What's the throughput at each location? How about profit margins?

...

Slightly off-topic but regarding profitability of a Tim Horton vs Starbucks, it's hard to say which is more 'successful.' Tim Hortons (TMI) stock was doing well leading up to the merger with Burger King Worldwide (BKW) in mid-December 2014, showing growth year over year. The amalgamated company, Restaurant Brands Inc (QSR), just posted their first quarter figures which showed that although they established a net loss for the quarter, comparable sales at both Timmy's and at Burger were up 3-4% since the merger (source: http://www.cnbc.com/id/102430650). Since the merger, QSR has been up about 14%.

Flipping over to Starbucks (SBUX), they've shown straight and steady year over year growth for the past 6 years in a row, from around $10/share in 2009 to now over $90/share with no splits. As of the Tim's & Burger King merger, however, both QSR and SBUX have increased at roughly the same rate (~15%).

What does this all mean to real estate prices? I have no idea. Maybe investing in coffee shop companies is more lucrative than investing in real estate.

 

[DarnDirtyApe]

What was the point of this tangent again? I can't even remember.

My neighbourhood also has a Tim Horton's in a Shopper's Drug Mart with a walk-up window. It does a brisk business serving subway drivers, since it's strategically located between Coxwell station and the Danforth Garage office. I'm not sure how that affects property values...

 

[James]

So I think most of us can attest that retailers (like Starbucks) don't really affect neighborhood property values after all, but rather, it's the neighborhood that precipitates the addition of particular retailers like Starbucks. So all that said, has there ever been a situation where a retailer has clearly either increased or decreased the desirability of any particular Toronto neighborhood in the past?