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McDonald's may gain fresh hangout status as Starbucks rocked

By LESLIE PATTON
Bloomberg

April 18. 2018 8:31PM
A Starbucks Corp. coffee shop in New York, on Jan. 17, 2016. (VICTOR J. BLUE/BLOOMBERG)



Despite decades of pushing to create a welcoming coffeehouse culture in the U.S., Starbucks has left many Americans behind. McDonald’s may be ready to pick up the pieces.

The arrest last week of two black men at a Philadelphia Starbucks has put the company at the center of national concerns about racial inequality. Starbucks cafes tend to be located in relatively affluent, disproportionately white areas, according to data analyzed by Bloomberg.

So its bid to cultivate a “third place” — a location between home and work where customers can relax and have a conservation — naturally caters to the customers who live nearby, even as its marketing promotes more racial diversity.

According to Bloomberg’s analysis of information from AggData and the U.S. Census Bureau, Starbucks neighborhoods skew less black than the surrounding population. Across the U.S., ZIP codes including at least one Starbucks location are 9.9 percent black and 59.1 percent white.

That compares with an overall population that’s 12.1 percent black.

“They could absolutely be doing more if this was truly a strong value of theirs,” said Rosalind Chow, an associate professor of organizational behavior and theory at Carnegie Mellon University.

The mantle of creating a true “third place” actually may fall to another, less idealistic chain: McDonald’s. The restaurant is a popular hangout for a wide range of demographics. And despite having roughly the same number of U.S. locations as Starbucks, its restaurants are more representative of America.

ZIP codes including at least one McDonald’s restaurant are 13.2 percent black and 58.7 percent white. McDonald’s also is predominantly run by independent operators, giving it a more diverse ownership group.

Since the early 1970s, the company has had an organized group of black franchisees — a coalition once overseen by Herman Petty, the first African-American owner of a McDonald’s. Petty opened a location in inner-city Chicago in 1968.

In the late 1990s, Starbucks teamed up with Magic Johnson Enterprises to invest in stores in underserved neighborhoods.

The partnership ended in 2010, but after the demonstrations in Ferguson, Mo., in 2015, the company recommitted to opening cafes in poor urban neighborhoods.


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