BROOKLYN CENTER, Minn. (WCCO) — Caribou Coffee is apparently putting up the white flag in its competition with coffee giant, Starbucks. The company has announced that 160 Caribou stores across the country are either closing down or changing names.

Customer Marilyn Martin loves her coffee and the staff at the Lyndale Avenue Caribou. She visits several times each week.

But when she entered Monday morning, she saw a sign on the front door. The store’s last day is April 14.

“Ohhh, I’m just crushed,” Martin said.

But the most crushing news will be felt out of state, primarily with locations in the eastern part of the country. That’s where Brooklyn Center-based Caribou will be closing 80 underperforming stores and changing the name on 88 more to Peet’s Coffee and Tea.

The move comes just four months after Caribou’s purchase by a German firm, Joh. A. Benckiser, for $340 million. Earlier in the year, Benckiser also acquired Peet’s Coffee, which has a strong presence out east.

Aseem Kaul is a strategy professor at the Carlson School of Management. He’ll be watching to see if the Caribou name maintains its strong presence regionally.

“It’s primarily a local brand, and that’s really its strength. So I think you’ll see more of them playing up that strength and, in some essence, getting rid of the east coast presence,” Kaul said.

It appears, he said, to be the strategy for growth that Benckiser is pursuing – competing with giant Starbucks by knitting together smaller brands that have strong local allegiance.

Caribou was the nation’s second largest coffeehouse chain with over 600 locations and annual net revenues of $326 million. But it pales compared to Starbucks’ 12,500 stores and $13 billion in sales.

Still, for Caribou customers like Martin the change is bittersweet.

“You know, Caribou started here in Minnesota, unlike Starbucks. I mean nothing with that — they’re both American companies — but you like to support your local,” she said.

In a written company statement, Caribou CEO Mike Tattersfield said, “Over the past few months, we at Caribou have revisited our business strategy, including closely evaluating our performance by market to make decisions that best position us for long-term growth.”

Caribou is not saying which of its stores it will be closing on Sunday, but it plans on retaining the Caribou name on 468 stores west of Wisconsin.

Bill Hudson

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