Three of the four Starbucks in Hermosa Beach’s 1.4 square miles closed Saturday, September 26, as part of a national cost cutting effort by the coffee giant. The three closings are the downtown store, on Hermosa Avenue; the drive-thru in the Trader Joe’s parking lot, on Pacific Coast Highway; and the newly opened Starbucks on Pacific Coast Highway, directly across from Trader Joe’s. An El Segundo Starbucks also closed.
The Starbucks inside the former Vons, at Pier Avenue and Pacific Coast Highway, will remain open. The Vons was newly rebranded as Pavilions.
Letters posted to the doors of the now closed Starbucks stated, “We’ve made the difficult decision to close this Starbucks by the end of this week. We know many of you will be thinking of your favorite partner, and we’re working closely to support our partners through this transition.”
Julia Kovacs, a barista at the downtown location, said she was given two days notice.
“It just sucks because we didn’t get any notice. We’ve got $500 in tips today because customers are like, ‘We love you guys,’” Kovacs said.
David Pio went to the downtown Hermosa Starbucks with his dog, Dodger, almost every day. “I can’t think of a time when I’ve ever seen anybody here not just be the most welcoming and friendly,” Pio said the day before it closed..
Employees said they expected to find out on Sunday, by email, if they will be reassigned to another Starbucks.
“There are 75 baristas and supervisors in our district and only 29 positions available,” Kovacs said. “I’m anxious because they’re almost treating it like a raffle. Who’s going to get their job? The market’s not that great. Everyone is on edge.”
The abrupt store closures in Hermosa Beach do not reflect the broader nationwide Starbucks landscape, according to Tony Cordi, a South Bay commercial real estate broker.
“If you look at their total number of stores at the beginning of this year and what it’ll be at the end of this year, it’s a drop of only one percent,” Cordi said.
“I think it’s hard for Starbucks to compete in our coastal communities,” Cordi said. “I’m thinking the reason these places are closing is because they’re underperforming relative to other Starbucks nationwide.”
Commercial rent in Hermosa Beach has seen a dramatic rise in recent years as more chef-driven restaurants enter the culinary arena. “As a rule of thumb, for every $1,000 in rent, the business has to do $10,000 of business,” Cordi said. “And if you think of it in the context of these places that are paying $5,000, $10,000, $15,000, it’s an extraordinary amount of pressure for them to do well.”
Despite this pressure, Hermosa’s commercial vacancy rate is healthy, according to Cordi. “Contrary to what some people might think, most of the city is a high occupancy area,” he said. “If these spots go on the market, it won’t take long before they are filled. I wouldn’t be surprised if these locations are replaced by other coffee houses.”
Rick Hankus, owner of Java Man on Pier Avenue, said, “It seemed a little much to have four Starbucks in Hermosa, a little bit overkill. I think it’s better that the independents are not going away.”
Hankus sympathizes with the Starbucks baristas in limbo with regards to their jobs.
“Those big guys, that’s exactly what they would do too. That’s hard. Especially that kind of job. I can’t get rid of my guys,” Hankus said.
But the proliferation of Starbucks did have one benefit, he said.
“People didn’t know what a cappuccino was when I opened 30 years ago,” he said. ER
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