Starbucks Ready for Growth Again

Starbucks is ready to start opening cafes again after a couple years of cost cutting resulted in the closure of hundreds of locations. During its fiscal year, the company plans to add 100 US stores as well as 200 internationally.

Management has high expectations for improved sales growth as the economy recovers. Starbucks also declared its first dividend at its annual meeting of shareholders yesterday.

CEO Howard Schultz says that Starbucks will now “grow in a different way.” Do you think the company is ready to start opening locations again, or is the market still over saturated with its cafes?

ALSO: Recession Chic: Saks, a Luxury Icon, Invests in Discount Stores

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7 Responses to “Starbucks Ready for Growth Again”


  1. 1 James March 25, 2010 at 7:30 am

    They need to sign a better lease! And I hope to see more of the larger stores that are true neighborhood gathering spots. Many in my local are too small and I think they are losing potential business because of it. I hope by now that Starbucks has fine tuned its site selection process to include a little science along with the “shoot from the hip anything will work” approach.

  2. 2 Dan Coffey March 25, 2010 at 7:57 am

    Ian
    They should not expand and oversaturte the market.
    They need to reinvet themselves to create a new niche like they did when they started. The orginal marketing concept was perfect that John Moore and his team did. The problem is that everyone else copied the concept and the follow up strategy that Starbucks did failed with the breakfast sandwhich and the distracted marketing concepts to make thema broader appeal to everyone. I think they need to stay to the core of their customers and build a new concept from the core and not get distracted by the fads. Reinvent on a soild concept to maintain the quality to distingush themselves from the marketplace. Make it a “love em or leave em” kind of concept to maintain loyal customers that do not mind paying extra for coffee. The employees behind the counter need to be the kind that would work there for nothing and elevate the Barista concept to a new level. Get to know your customers not saturate teh market.

  3. 3 Tahitijack March 25, 2010 at 10:14 am

    Before they hit the wall SBUX was doing about 1,500 North American stores a year, mainly in the US. So, rolling out 100 a year is probably about right, but I would feel more comfortable at 50 to 75 quality locations with favorable lease terms per year. I hope their development plan is to avoid overlap, no matter how tempting it may be. And, yes……please tighten up the deals. SBUS will find a few Landlord’s that welcomed them in the past are not so happy about closings or killed deals. Perhaps that’s whay they forecast 100.

  4. 4 steve March 26, 2010 at 7:37 am

    Can I ask what James means when he says they need to sign a “better” lease. better for whom?? Themselves or their Landlords?? We have done multiple leases with them and have been satisfied with the end document. Just curious as to that comment. Thanks.

  5. 5 Larry Allen March 26, 2010 at 8:30 am

    Agree with Ian and James here…these guys need to learn that the “real estate race” of the 80’s and 90’s is over. Demographic shifts, competition and the current economy dictate strategies of maximization, not expansion. They need to concentrate on improving their leases, positioning and customer share.

  6. 6 Doug March 30, 2010 at 8:39 am

    My question is how is Starbucks going to approach their lease renewals when half the portfolio turns over every 7 years? Are they going to be able to afford the rent increases or will they simply relocate or close a chunk of locations. A sustainable company is one that can not only expand and open, but have the fortitude to stay in place for a number od years.


  1. 1 Weekly Rewind: March 22-26 « Robert S. "Bob" Lowery Trackback on March 29, 2010 at 2:17 pm

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