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Citing Growth Elsewhere, Peet’s Bugs Out of Key Rust Belt Markets

Peet's Coffee

Peet’s in Hillsboro, Ore. Wikimedia Commons photo.

Peet’s Coffee & Tea has pulled the plug on all its remaining Ohio, Michigan and Pennsylvania stores, many of which had been open a year or less.

The company shuttered approximately 14 stores in those states in August, and Monday was the last day of operation for the remaining 11, including six stores in Ohio, three in Pennsylvania and two in Michigan. The vast majority of all the closed stores in those states were converted from Caribou Coffee locations beginning summer 2013. Both companies are owned by the German group Joh A. Benckiser.

Peet’s says it plans to give employees of the most recently closed stores an additional six weeks of existing hourly pay and benefits, through the end of January. The company also suggests the failed expansion attempts in these Rust Belt markets does not signal a decline in its retail growth strategy — for comparison’s sake, Peet’s operates more than 170 stores in California alone.

While the company had been tight-lipped about the rumored store closings, it recently offered this corporate statement:

Peet’s began an aggressive U.S. expansion in Summer 2013, and we’re seeing incredible growth in new markets like Chicago and D.C. As with any fast growing retail business, we continue to learn and make adjustment along the way to meet our long-term goals.

We recognize this is difficult timing, and we are providing our employees at least six weeks of pay and benefits support that will take them through the end of January. This means we’re paying them at their normal hourly rate through the end of this year plus at least one month of severance support. For the majority of these employees who worked both at Peet’s and Caribou, they will receive additional severance based on their collective tenure with both companies.

This is not an easy decision, but it’s important that we responsibly manage our costs and begin 2015 with a stronger focus on our top performing markets, including Chicago, D.C., Boston and California.

Comment

3 Comments

Ruth Ann Church

Nick – I don’t know whether it’s you, Roast Magazine or Peet’s press release, but I resent journalists who use the term “Rust Belt” to describe the thriving and interesting markets that Michigan, Ohio, Pennsylvania and the rest of the Midwest have to offer. Would hate to have to label you an East Coast snob, a West Coast snob, or a naive Southerner who thinks names (printed in the press) don’t matter. And if you’re a Midwesterner, shame on you.

Otherwise — I appreciate your Daily Coffee News.
Ruth Ann Church
President, Artisan Coffee Imports — proudly based in Ann Arbor, Michigan, (home of Toyota’s R&D center, Google Ad Words offices, Zingerman’s and, of course, the University of Michigan.)

Nick Brown

Hello Ruth Ann,

Thank you for reading. You bring up a very fair point. The hope was to describe key markets within a geographic region (Cleveland, Detroit and Pittsburgh) to which “Midwest” would not apply. But perhaps I completely underestimated the negative connotations of the term.

Kind Regards,

-Nick

Paulette

So sad to see the only worthwhile coffeehouse in town close. I was wondering why the place was open for such a short time. I was blaming it on Ann Arbor but I can blame it on the Rust Belt now. Too bad, I really love Peet’s.

Nick, you can call it the Rust Belt. Ann Arbor is in a little protective bubble thanks to the university so most of its inhabitants don’t know they live in the Rust Belt.

Happy Holidays and Happy New Year!

–former owner of a Rust Belt coffeehouse
Ann Arbor, Michigan

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