Bigfoot Dips Toe In Coffee
(FORTUNE Magazine) – It is certainly a case of strange bedfellows. Wal-Mart has teamed up with Hollywood image maker Benny Medina (the man behind the early careers of Will Smith, P. Diddy, and Jennifer Lopez) to experiment with a Starbucks-style coffee shop in a Texas outpost of the megastore.
It seems the big-box retailer is looking to give shoppers a low-key, upscale place to relax. Medina's Kicks Coffee Cafe, in a Plano, Texas, Wal-Mart, has low lighting and wooden chairs that make it a dead ringer for its heavyweight competitor. Wal-Mart says it has a purely landlord-tenant relationship with the shop, though the corporation had been considering a cafe concept when the Kicks proposal came in.
One unique Kicks development is an in-store delivery service, although there are kinks to work out. As of early December, a single Kicks employee wandered the giant Wal-Mart taking orders. If you were lucky enough to find him, you could order a cup of coffee--and stay put until it was delivered. But a test cup of house coffee in the actual cafe was, according to one customer, "a lot better than Starbucks."
Kicks is also taking a cue from its landlord and offering fancy coffee drinks at slightly lower prices than the competition's--about 25% below what a nearby Starbucks is charging. It remains to be seen whether the formula is a success. A Wal-Mart spokeswoman said the superchain has no plans to expand the partnership with Kicks: "We've got the one, and we'll watch that. We tend to test things quietly at Wal-Mart and see if things meet the fancy of our customers." Tests may be quiet, but major developments at Wal-Mart rarely are. If Kicks is a hit, Starbucks will be paying attention.