JEDDAH, 16 June — Starbucks, the world’s largest and most successful coffeeshop franchise, has had a turbulent year in Saudi Arabia. But business is now booming and its coffee is the talk of the town.
There were Islamic protests over their logo and a wide-ranging if unofficial boycott that has left many American franchises in the Kingdom flat lined. Yet the company Time magazine credits with “making coffee-drinking fashionable” continues to expand at an incredible rate.
Sound business strategy, or capitalist voodoo?
Arab News spoke with Starbucks Middle East business manager Boulos Younes, in Jeddah to coordinate with the opening of the new showcase branch on Palestine Street.
Starbucks made its entry into the Kingdom two years ago. The first two branches opened in Dammam, and more soon followed in Riyadh. Now there are 21 branches, the latest opening in Dammam where it all started.
Younes is steadfast in the face of a strong boycott of US goods that has even resulted in t-shirts being printed with “NO STARBUCKS” printed on them. “We’re in the coffee business. Starbucks is not just an American institution, but a global one. The coffee we serve comes from all over the world. We also employ 24 different nationalities in our company. We have many Jordanians who are originally Palestinian, who contribute a lot to our company. We are not interested in politics; we are only into good coffee.”
Was that “24 nationalities”?
What about Saudization, central to the Saudi government’s plan to diversify local economy in which youth unemployment is becoming an ever-greater problem?
Twenty-five percent of Starbucks staff are Saudi, it turns out, which is the minimum required by Saudi law.
“We do what the government rules and regulations demand of us,” Younes explained. “If we are required to have 30 percent, we will reach that quota. If it’s 50 percent they want, we’ll hire that number.”
Could it be, with such a massive expansion in such a short period of time, that Starbucks is over-estimating local customer demand?
“We monitor our sales on a daily basis, and when we consider a new location we do intensive market research before any decisions. Of course, some stores are inevitably more successful than others.”
It may not be putting it too strongly to say that Starbucks is introducing to the Kingdom a quality almost universally lacking up to now: the concept of customer service.
The staff who work in their branches are highly trained and disarmingly polite, to the extent that their constant “sir”, “madam” and “have a nice day” might, if you are not an American, drive you up the wall.
“We have a training program made up of 10 levels which each of our partners” — Starbucks’ term for their staff - “have to complete. It is very intensive, and expensive. Exactly what course a partner takes depends on what position they would like to hold. But the main objective is serving a great cup of coffee. More importantly, we give a reason for the customer to visit us: they can have coffee at home or at another store, but what we provide is great service and great coffee.”
Robert Fisk wrote in yesterday’s Arab News, in Beirut activists leafleted outside the city’s four Starbucks shops, detailing the pro-Israeli sentiments of its chief executive, Howard Shultz, and claiming he is “an active Zionist”.
In 1998, Shultz was awarded the “Israeli 50th Anniversary Tribute Award” from the Jerusalem Fund of Aish Ha-Torah, which is strongly critical of Yasser Arafat and insists that the occupied Palestinian territories should be described only as “disputed”.
In a speech to Jewish Americans in Seattle earlier this year at the height of Israeli Prime Minister Ariel Sharon’s reoccupation of West Bank towns, Starbucks’ top man condemned Palestinian “inaction” and announced that “the Palestinians aren’t doing their job, they’re not stopping terrorism”.
Gideon Meir, an Israeli Foreign Ministry spokesman, complimented Shultz for helping American students to hear “Israeli presentations on the Middle East crisis”.
Younes, when asked what he thought of all this, played the quintessential diplomat: “Shultz’s opinion was his own personal one, not a professional statement,” he said. “He didn’t say it on behalf of Starbucks, but on behalf of what he believed.
Everyone has his own personal views. Starbucks is a part of every community. It’s not just a franchise. We have programs to help whatever community we are a part of.”
