Starbucks and the Future of Dental Practice

While the connection between Starbucks and dental practice might not be immediately apparent, the manner in which the Seattle-based company is evolving to meet current demand should be a wake-up call to the oral health care profession. An article in The Wall Street Journal details a new business strategy for Starbucks. Most are aware this company built an empire on the premise that a large number of people would pay more than a dollar for a cup of coffee. There are now more than 25,000 Starbucks worldwide. Effective April 3, Howard Schultz stepped down as CEO, but stayed on as executive chairman to further develop two new types of stores. The first is the Starbucks Reserve Roastery and Tasting Room (SRRTR), which features exotic coffee in small batches made using special preparation techniques. The most expensive cup is around $12. Another group of smaller outlets, Starbucks Reserve, commands prices higher than traditional Starbucks, but below SRRTR.


Why is this company — which has been wildly successful the last quarter-century — radically altering its business plan? The reason given by The Wall Street Journal was that sales targets were not being met. The company concluded this stemmed from multiple factors — one being that discretionary income available to the middle class continues to decline, thus reducing the number of people who can afford high-end products. Additional reasons include the current economic uncertainty, and that Starbucks customers are visiting malls less frequently. Erich Joachimsthaler, CEO and founder of the consulting firm Vivaldi, is quoted in the article as saying, “I think Starbucks sees the middle is slowing down.”

What is the message for those of us in private practice? As previously discussed in this space, the middle class in the United States is shrinking, and so is its discretionary income. The reasons are myriad. Globalization has led to a reduction of jobs for this group over the last few years, creating a general feeling of unrest. Concerns include the economy, world affairs and the recent election. These and other factors have created uncertainly about the future. And individuals who are worried about the future and have less discretionary income don’t usually spend significant sums on dental treatment.

Understanding how this may affect your practice is important. The trend toward more reimbursement and regulation by third parties will continue. The number of group and corporate dental practices will also grow. As a result, it will be harder for solo practices to thrive. Now is the time to actively explore which practice setting best suits your needs and temperament.

How do you make these decisions? Gather information about your current economic situation and write out your short- and long-term goals. Deciding how best to reach these goals will require effort. Talk with fellow professionals, search the Internet and network at dental meetings. If Starbucks’ business plan adjustment is any indication, the time for action is now. Only by exploring evolving practice opportunities can clinicians hope to find a clinical environment that’s financially and professionally rewarding.

Thomas G. Wilson Jr., DDS
Editor in Chief

From Decisions in Dentistry. April 2017;3(4):8.

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