Starbucks Recasts Its Stores, With Help From Oprah

NEW YORK (TheStreet) -- Here in the city where I live, a coffee shop that wants to compete with Starbucks (SBUX) is a lot more than a coffee shop.

It's a de facto community center.

It's a conference room for home-based businesses to meet clients. It's a tea shop for harried mothers in the afternoon. It's a wine bar for couples that can't afford a whole night out. It's a music venue. It changes its role with the time of day and the needs of the people it serves.

Starbucks now wants to copy this model at thousands of its stores across the U.S. suburban landscape. That means getting thousands of beer-and-wine licenses. It means rolling out much larger and wider menus. And it means the Starbucks you drop into during the evening will be very different from the one where you grabbed your cappuccino that morning.

The idea is to get in-store traffic throughout the day, whenever and however people want to stop and relax. Suburban moms might get together in the afternoon over some Oprah-branded chai tea, maybe bringing little kids in strollers with them. Couples might meet for a glass of wine and a bite to eat after work.

The risk is these stores can get in the way of one another, especially in suburban and exurban locations where Starbucks does most of its business. Zoning laws treat doughnut shops and wine bars very differently.

So do community leaders, and church leaders. If you saw Pastor Dan walk into a Starbucks one night a year ago, you knew he was probably working on Sunday's sermon. If you see him go in next year, you may wonder whether he's having an affair.

But Starbucks has to take this risk if it's to overtake companies like McDonalds (MCD) in market value. Right now its market cap of $57.4 billion is less than two-thirds the larger chain's $95.1 billion. McDonalds has made itself a global brand with stores that can serve every part of the local day. To keep growing, Starbucks must do the same.

In this new effort, Oprah Winfrey becomes an important bridge. There's a big difference between the jittery edge you get from a cup of coffee and the feeling you get from seducing someone over two glasses of wine.

Oprah and her chai tea can change the mood in a store, from hyper to relaxed, and change its demographics, skewing it female. Instead of walking in during an early evening to a room full of hard-working caffeine addicts, you're seeing a more diverse crowd, with different interests. That makes the transition to a wine bar less jarring.

Starbucks has been featuring music in its stores for a decade, using the sound track to change the mood of a store as the day goes on. Maybe now it can bring in live acts during the evening, a soft guitar gently weeping in one corner as people grow more comfortable with each other.

Many Starbucks stores are already open late into the evening, and this creates some risk. If your teenagers meet up at a Starbucks in the evening today, you can feel pretty certain it's a wholesome environment that will lead to nothing more serious than a sugar rush. Add wine to that mix, even if it's not your teens ordering it, and things get more volatile.

So there are risks here. Community risks. Legal risks. But CEO Howard Schultz has laid his groundwork carefully, testing his concept over several years, and bringing in Oprah as a bridge between the old hypercaffeinated Starbucks and a newer, mellower store in which moods change throughout the day.

My guess is most suburbs will give him a chance. But watch out if the police reports start piling up.

At the time of publication the author owned shares of SBUX.

More from Opinion

It's Dumb to Think Legalizing Weed Is Still a Political Issue

It's Dumb to Think Legalizing Weed Is Still a Political Issue

AAP Exclusive: Cramer Says The President is No Longer on the Side of the Bulls

AAP Exclusive: Cramer Says The President is No Longer on the Side of the Bulls

Why It Makes Perfect Sense for Netflix and Amazon to Buy Up Movie Theaters

Why It Makes Perfect Sense for Netflix and Amazon to Buy Up Movie Theaters

2 More Reasons to Sell All Your Stocks and Run Away

2 More Reasons to Sell All Your Stocks and Run Away

Sean Hannity's Link to Trump Lawyer Raises Questions: Doug Kass Insider

Sean Hannity's Link to Trump Lawyer Raises Questions: Doug Kass Insider