Starbucks is coming to downtown Rockford; local coffee shops brace for national competitor (2024)

Starbucks is coming to downtown Rockford; local coffee shops brace for national competitor (1) Urban Equity Properties announced on Friday, Aug. 30, 2024, that Starbucks would be its first tenant at 213 W. State St. in downtown Rockford. The building is pictured on May 29, 2024. (Photo by Kevin Haas/Rock River Current)

By Kevin Haas
Rock River Current
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ROCKFORD — Developers spilled the tea Friday on an announcement that has been brewing for months: Starbucks is coming to downtown.

Urban Equity Properties revealed the multinational chain of coffeehouses as its first tenant at State and Main streets, an 11,700-square foot Art Deco building that it’s redeveloping into a mix of retail and office space.

The goal is to complete a fast-paced build and open Starbucks in November in time for Stroll on State.

“It will be, I should mention, one of the coolest Starbucks designs that anyone has seen,” said Justin Fern, the founding principal of Urban Equity Properties. “It has special attention, just based on the architecture of the property and what we’re doing.”

It will be open seven days a week.

“That’s just what we need downtown,” Fern said. “We need businesses open on Saturdays and Sundays.”

Starbucks is coming to downtown Rockford; local coffee shops brace for national competitor (2) Rockford River District President John Groh, with Justin Fern and Mayor Tom McNamara, speaks at a news conference on Friday, Aug. 30, 2024, in downtown Rockford. (Photo by Kevin Haas/Rock River Current)

The coffee chain is the first of two businesses that will be on the ground floor of the $4.5 million redevelopment project. There will be loft office space on the second and third floors.

Fern said this adds to the forward momentum that’s come with other downtown projects, including several of UEP’s residential and business developments. Getting attention from national chains is a sign that “we’re getting to another level.”

“Our occupancy numbers are very high and now we have national tenants looking at downtown Rockford. This is a huge win for our city,” Fern said. “It’s that forward momentum. We want to keep moving in the right direction every year.”

The publicly traded coffee corporation will enter a downtown market that already has four locally owned shops: Wired Cafe, 414 E. State St., Inzombia Coffee, 306 E. State St., Rockford Roasting Co., 416 S. Main St., and Mo’s Coffee and Cafe, 303 Mulberry St.

“It challenges us to have a better product,” said Joshua Patterson, general manager and part of the ownership team of Wired. “I would put our drinks and our food up next to Starbucks or anybody. I would put it up next to them and let the customers make a decision.”

‘Bring it on’

Wired, which recently celebrated 14 years in business in downtown, also operates from a building owned by Urban Equity Properties. The coffee business is owned byEight Fifteen Capital, a local real estate investment firm that includes friends and customers of the original owners.

Patterson said customers love Wired’s food, drinks and the sense of community at the locally owned shop. He said there’s potential for Starbucks to affect its business, but he also sees it as an opportunity to show why Wired deserves your business.

“We believe in ourselves. We believe that Wired Cafe’s drinks, Wired Cafe’s food and Wired Cafe’s environment is just better,” he said. “I say bring it on.”

The announcement was made during a morning news conference with Urban Equity Properties, Mayor Tom McNamara, Rockford River District President John Groh and other city officials.

McNamara said successful downtowns have a good mix of locally owned businesses and national franchises, which do significant market research before deciding on a location. He said brands like Starbucks can drive more traffic to other businesses.

“That balance of making sure that 80-85% of the businesses in your city center are those local businesses, but you need some of those national chains to help drive some additional traffic that may not come just from the local businesses,” McNamara said.“When you have a major brand come in, it can be very good for your local companies as well.”

Inzombia Coffee opened in downtown in June 2022, and it added a second location at Rock Valley College last October.

“We’ve just celebrated our two year anniversary, and let me tell you, we are just getting started,” Inzombia owner Pete DuFoe said. “With that being said on a personal level I think Starbucks coming downtown is just silly. UEP already has a family-owned, well established coffee shop inside their building just across the river. Makes no sense to bring in a monster chain corporation into downtown.”

DuFoe said that Starbucks popularity could, however, come with some positives for local business owners.

“With more foot traffic, exposure and visibility for Inzombia, more people will know more about us and find that Starbucks is just our mascot standing outside holding an arrow in our direction,” he said.

Many pledged their support for local coffee shops after the announcement. Among them was independently owned Maze Books, which quickly announced a 10% discount through Sunday fro anyone who shows proof of purchase at a locally owned downtown coffee shop.

Rockford Roasting Co. is preparing to celebrate 10 years in the coffee business with an all-day event on Oct. 5 that comes complete with a coffee farmer from Honduras providing education.

“I don’t feel threatened by Starbucks,” said Benjamin Chauvin, founder and head roaster at Rockford Roasting. “I think our products are different enough. I think our clienteles are probably seeking different experiences.

“I’ve kind of always felt like if we existed right next to a Starbucks it would probably be fine. We might not do the same number of sales, but we would do enough.”

Chauvin said Starbucks entry into downtown doesn’t necessarily mean there will be a smaller share of the pie for the other coffee shops. “I’m not super worried about just losing customers to Starbucks,” he said.

“Coffee in Rockford has been growing. We’ve been a big part of that for the last 10 years.I think there’s always going to be more customers who are growing an interest in coffee,” he said. “Cafes like ours will continue to explore those uncharted territories with the way drinks can taste and the way flavors can go together.”

‘Mix is important’

John Groh, president of the Rockford River District, said its organization looked at communities that Rockford benchmarks itself against such as Grand Rapids, Iowa City, Evanston, Madison and Geneva when considering the announcement about Starbucks.

“Those communities, which I think everybody would agree have strong downtowns and commercial districts, have a strong mix of locally owned, independently operated companies, boutiques and restaurants as well as nationally known organizations,” he said.

Starbucks is coming to a corner across the street from the Rockford Area Convention & Visitors Bureau, where Groh works as its president and CEO.

“To see this corner reactivated is huge,” Groh said. “I’ve seen this building vacant and decaying until about a year ago when Urban Equity Properties bought it, started stabilizing it and improving it.”

Fern said there is enough of a customer base for local and national companies to operate at the same time.

“You’re going to have folks that enjoy the local coffee shops, and a lot of folks that enjoy the national Starbucks brand,” Fern said. “I think there’s room for everyone.”

McNamara said Starbucks, unlike some chains, doesn’t come in and undercut local businesses with lower prices.

“They’re not coming in here to be the lowest price cup of coffee you can find,” he said.

The mayor said many local businesses downtown are already embedded into this community.

“They’re not just a business. They are themselves a community,” he said. “When you walk into Wired, it is like a family: That’s not going to change.”

Urban Equity’s redevelopment of the property was supported by city incentives. The developer was awarded a forgivable loan of up to $1 million by the city in May. It will also be reimbursement of 100% of funds the project generates from the tax-increment finance district on a pay-as-you-go basis through 2031.

Downtown had even more coffee shops last year. Rockford Roasting Co. consolidated its two shops in March 2023, continuing to operate out of its location at the Embassy Suites by Hilton Rockford Riverfront hotel. Velvet Robot closed its coffee shop on Madison Street in December and moved to 10514 Main St. in Roscoe. It also runs its shop at 1292 S. Alpine Road in Rockford.

“Another coffee shop coming in definitely raises eyebrows,” Patterson said. “The potential for it to impact business is definitely there. Everybody’s going to have to step their game up and think of creative ways to compete.”

This article is byKevin Haas. Email him atkhaas@rockrivercurrent.comor follow him on X at@KevinMHaasor Instagram@thekevinhaasand Threads@thekevinhaas

Starbucks is coming to downtown Rockford; local coffee shops brace for national competitor (2024)

FAQs

How Starbucks compete with its competitors? ›

How Does Starbucks Differentiate Itself From Competitors? Starbucks differentiates itself by creating a "third home" value proposition. In addition to home and work, the company strives to have a welcoming, warm location for customers to consume their products.

Why Starbucks is different from other coffee shops? ›

Starbucks is a bigger company in terms of market capitalization and the number of stores globally. Starbucks has also built a more premium brand, has stores that look more like a comfortable coffee house, has a more extensive menu, and greater product customization.

How can Starbucks stay competitive? ›

Consistency is another important value of their brand. No matter which Starbucks you visit, you can expect the same high standards in terms of coffee quality, taste, preparation, and funny names. To make your business instantly recognizable, develop iconic branding and keep it consistent.

How is Starbucks a perfect competition? ›

Starbucks belongs to a purely competitive market because it has competitors such as Coffee Bean, Peet's Coffee, and Dunkin Donuts, which sell coffee just like Starbucks. All these companies offer the same products, and their prices are very close.

How does Starbucks stand out from other companies? ›

Price: Starbucks sells their coffee at least 25% higher than other brands. It offers its customers exceptional drinks and food, charges more, and the people are willing to pay. Promotion: From social media to TV to ads– the company uses various channels for marketing its products.

What makes Starbucks special? ›

Starbucks cafés have become a beacon for coffee lovers everywhere. Why do they insist on going to a Starbucks café? Because they know they can count on genuine service, an inviting atmosphere, and a superb cup of expertly roasted and richly brewed coffee every time.

Why is Starbucks more popular than other coffee shops? ›

Brand Is Everything

The same can be said about Starbucks. Most consumers will continue to buy coffee from Starbucks because they are familiar with the brand; therefore, they know exactly what they are buying even if the coffee shop next door is serving better quality coffee at a lower price.

How has Starbucks gained a competitive advantage? ›

In the case of Starbucks, the company's unparalleled 1.name recognition, its 2. reputation for high-quality specialty coffees served in a comfortable, inviting 3. atmosphere, and the 4. accessibility of the shops make it difficult for competitors to weaken or overcome Starbucks's competitive advantage.

What makes Starbucks different from other companies? ›

THE STARBUCKS MISSION

From the beginning, Starbucks set out to be a different kind of company. One that not only celebrated coffee and rich tradition, but that also brought a feeling of connection. Our mission is to inspire and nurture the human spirit—one person, one cup and one neighborhood at a time.

Who are Starbucks' top 3 competitors? ›

Starbucks' main competitors include Dunkin Donuts, McDonald's, Burger King, and establishments owned by Yum Brands. Dunkin Donuts is the organization which competes most directly with Starbucks, as both companies are predominantly coffee restaurants.

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