Starbucks' expansion was interestingly "clumpy". Not surprising, I guess, when you realize they have to deal with the same supply chain issues as anyone else in a similar space. They didn't open a freestanding store in Tulsa until 2002, years after seemingly every other corner in Manhattan had one.
Starbucks also has a very sophisticated siting operation which predicts demand similar to how an oil company predicts oil. For green fields, you measure proxies, look at formula based on historical data, and guess. If you sink one well and hit a gusher, though, your expectation of profitable exploitability in the vicinity goes WAY up, so you start going nuts.
You'd think that two Starbucks across the street would cannibalize each other, but you'd be betting against very smart people who have made this their lifes' work and been richly rewarded for succeeding at it.
Source: anecdata from my father, who works in commercial real estate and thinks they (and Walgreens) are the two savviest businesses he's ever worked with in his industry.
P.S. A software solution to turn any arbitrary firm into Starbucks would be worth tens of millions of dollars if you sold it correctly. Billions if you went the next step and started flipping properties based on the software. (e.g. "101 Main St. on foreclosure auction for 200k, predicted value to a banking customer is 1.2 million, expected cost to work deal is 200k. Placing bid now.")
As I understand their placement of stores, the "cannibalization of customers" is how they determine if they have sufficiently saturated a metropolitan area. Basically, they keep building stores in a city until adding one more doesn't increase their overall business. The basic idea is that if they haven't saturated an area, then there's room for competitors to put in stores. I wish I could remember which publication I read this in.
You'd think that two Starbucks across the street would cannibalize each other
Speaking of that, would they operate as two competing entities? Or would they help each other out? Ie lend each other supplies, direct overflow customers across the street, refrain from price wars, things like that.
Freestanding Starbucks stores aren't franchises, so they have every incentive to coordinate for maximum benefit. I'd be surprised if SBUX management had set up any incentives for it to work any other way.
Even if they were franchises, there might still be some game-theory advantage to cooperating. After all, a happy customer at one Starbucks is going to be positive toward all Starbuckses.
