Thursday, December 6, 2012

Starbucks Corporation (NASDAQ:SBUX) to open more stores in the U.S.

Starbucks Corporation(NASDAQ:SBUX), the ubiquitous coffee chain, plans to open 1500 more cafes in the United States, the company said on Wednesday.

The company, which has an outlet around every corner, said that would raise the number of its outlets by 13 percent by 2017, while in that time period, it would add another 3,000 cafes in the broader Americas region.

Starbucks, which just made an entry into the Indian market, also plans to expand into other markets particularly in China, which is expected to surpass Canada as Starbucks' second-biggest market in the next two years, Associated Press said in a report.

By that time, Starbucks says it will have 20,000 stores globally, up from about 18,000.

The world's largest coffee chain hit a bit of rough patch during the worst of the recession but has since been on a comeback path after bringing back its founder Howard Schultz in 2008 to head the company.

The company then embarked on a massive restructuring exercise which involved closing down about 10 percent of its stores in the U.S.

According to Cliff Burrows, who heads Starbucks' domestic business, 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.

However the company has been rationalising its store location and closing down stores that were not viable, while opening stores in other locations.

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