Indeed, the crowding of so many stores so close together has
become a national joke, eliciting quips such as this headline in The
Onion, a satirical publication: “A New Starbucks Opens in Restroom of Existing Starbucks.” And even the company admits that
while its practice of blanketing an area with stores helps achieve
market dominance, it can cut sales at existing outlets. “We probably self-cannibalize our stores at a rate of 30 percent a year,”
Schultz says. Adds Lehman Brothers Inc. analyst Mitchell Speiser:
“Starbucks is at a defining point in its growth. It’s reaching a level
that makes it harder and harder to grow, just due to the law of large
numbers.”