Starbucks (NASDAQ: SBUX) today detailed strategies for its next phase of growth at the company’s biennial Investor Conference. Building on its continued strength in attracting global consumers to its stores and growing its business in that critical channel, Starbucks senior leaders outlined plans to create a multi-faceted, global consumer brand and the significant potential to achieve a greater share of the nearly $145 billion world coffee market with a renewed focus on innovation and expansion.
Starbucks chairman, president and ceo Howard Schultz outlined plans to create long-term shareholder value. “We are building a solid and secure foundation for profitable growth in both new and existing businesses,” Schultz said. “Our next phase of growth will come from extending the Starbucks Experience to our customers beyond the third place to every part of their day, through multiple brands and channels. Starbucks U.S. retail business and our connection with our customers form the foundation on which we build all of our lasting assets, and we will combine that with new capabilities in multiple channels to accelerate the model we’ve created that no other company can replicate.”
Addressing the “myth of U.S. saturation,” Cliff Burrows, president of Starbucks Coffee U.S., outlined the continued sizable opportunity for profitable growth in the U.S. retail business. Growth will come from existing stores through increasing capacity and expanded day-parts, and through innovative store segmentation, with new concepts and formats in strategic locations. “We’ve improved store-unit economics in a significant way over the past two years,” stated Burrows. “We now have the opportunity to apply these broad-based improvements to retail expansion, as we engage customers through targeted initiatives such as My Starbucks Rewards and Starbucks Digital Network, create capacity at peak hours, and capture more day parts.” Burrows also noted that, while the company will not add stores in the U.S. at the pace it once did, it will seek out new locations in targeted neighborhoods to capture significant retail growth opportunities, focusing on opening one store at a time.