Perking up — World’s largest coffee company plans to add 1,500 cafes
by Candice Choi
Associated Press Writer
December 06, 2012 12:00 AM | 640 views | 0 0 comments | 4 4 recommendations | email to a friend | print
Pedestrians are reflected outside a Starbucks store in Atlanta in 2011. Starbucks, the world's biggest coffee company, is planning to add at least 1,500 cafes in the U.S. over the next five years. The plan, which would boost the number of Starbucks cafes in the country by about 13 percent, was announced at the company's investor day in New York on Wednesday.<br>The Associated Press
Pedestrians are reflected outside a Starbucks store in Atlanta in 2011. Starbucks, the world's biggest coffee company, is planning to add at least 1,500 cafes in the U.S. over the next five years. The plan, which would boost the number of Starbucks cafes in the country by about 13 percent, was announced at the company's investor day in New York on Wednesday.
The Associated Press
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NEW YORK — Another Starbucks may soon pop up around the corner, with the world’s biggest coffee company planning to add at least 1,500 cafes in the U.S. over the next five years.

The plan, which would boost the number of Starbucks cafes in the country by about 13 percent, was announced at the company’s investor day in New York Wednesday. Taking into account Canada and South America, the company plans to add a total of 3,000 new cafes in its broader Americas region.

Worldwide, the company says it will have more than 20,000 cafes by 2014, up from its current count of about 18,000. Much of that growth will come from China, which the company says will surpass Canada as its second-biggest market.

Although Starbucks has been intensifying its growth overseas and building its packaged-goods business back at home, the majority of its revenue still comes from its more than 11,100 cafes in the United States.

In an interview ahead of its investor day, CEO Howard Schultz said the U.S. expansion plans are based “on the current strength of our business”

Just a few months ago, the company had predicted it would open just 1,000 new cafes in the country over the next five years.

The upbeat expansion plans mark a turnaround from Starbucks’ struggles during the recession. After hitting a rough patch, the company brought back Schultz as CEO in 2008 and embarked on massive restructuring effort that included closing 10 percent of its U.S. stores.

Cliff Burrows, who heads Starbucks’ domestic business, said the problem wasn’t that Starbucks was oversaturated, but that the company hadn’t been careful about its store openings. In the years leading up to the downturn, the company was opening well over 1,000 stores a year. That led to cafes in locations where signs or traffic might not be optimal, he said.

Burrows said Starbucks has gotten more sophisticated, and noted that the cafes opened in recent years are among the company’s best performers.

Sales at new cafes are averaging about $1 million a year, for example, above the company’s target of $900,000. It costs about $450,000 to build a new cafe.
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