Starbucks' Big Expansion Plans: Yes, There's Still Room for It to Grow

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Starbucks restaurantIt may feel like Starbucks (SBUX) shops are everywhere, but apparently there's still plenty of global real estate left to conquer.

The java giant announced aggressive worldwide expansion plans on Wednesday morning. Starbucks plans to have more than 20,000 total retail stores open globally by 2014, up from the 18,066 locations open at the end of fiscal 2012.

The biggest surprise, however, is that the star of that push will come through the addition of new domestic stores.

Over the next five years, Starbucks is planning 3,000 net new stores in the Americas, and more than half of those locations will be in the United States.

Starbucks will also grow in Asia, going from nearly 3,300 stores now to more than 4,000 units by the end of 2013. China will become the coffee giant's biggest market outside of the U.S. in 2014, and the goal is to have 1,500 Starbucks stores in 70 Chinese cities by 2015.

Starbucks isn't committing to any hard numbers in Europe, Africa, or the Middle East -- territories that remain works in progress for the company. Additionally, the company plans to renovate thousands of existing stores.

Juicing the Brand

Pushing for expansion both here and abroad isn't new. There are still plenty of markets for the company to tap. It opened its first store in India last month, and earlier this year broke into Costa Rica -- where it has been sourcing some of its beans since 1971.

However, Starbucks is moving beyond the coffee cup.

Recent acquisitions include the Evolution Fresh juice line and La Boulange bakery chain. It's also in the process of completing its purchase of upscale mall retailer Teavana.

All of those deals will start to come together in the coming months. By the end of 2013, 2,500 of its domestic stores will begin baking up La Boulange products. Twice as many stores will be offering Evolution Fresh juices.

A Tea-volution Brewing at Starbucks

Starbucks is also detailing the synergies it plans to unlock at the 300-store Teavana chain.

Teavana stores primarily sell loose teas and tea-making gear at high-end malls, but Starbucks will beef up the sales of warm beverages brewed within the stores. It will also eventually begin serving fancy Teavana brews at its own Starbucks locations.

There is also a high-profile neighborhood store concept in the works for Teavana, as Starbucks aims to transform the tea industry the way that it has the premium coffee market.

There's a lot on Starbucks' plate, but it's exactly where the company wants to be. It's hard to imagine that this is the same company that was closing down stores just a couple of years ago. But some brews just take time.






Motley Fool contributor Rick Munarriz does not own shares in any stocks in this article. The Motley Fool owns shares of Starbucks. Motley Fool newsletter services have recommended buying shares of Starbucks.


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ralphtotherescue

Here in California the supermarkets have little counters where they serve coffee; Starbucks or others.
Many also have small bank branches. Also, the regular banks offer free coffee in the lobbies.
What I haven't seen yet is a Starbucks counter selling brewed coffee in a bank, or a bank branch in a Starbucks (where the customer can take out a bank loan to finance a Frappachino Deluxe.) But I'm sure that is coming.
Chase Bank has been so busy opening new branches here lately that their employees could probably use a quick pick-me-up.

December 06 2012 at 6:53 AM Report abuse rate up rate down Reply
Jeffrey Kohut

It seems that most of the leading fast-food/comfort food/coffee-tea based franchises and company owned outlets (Starbucks) have reached saturation (in the US/Canada) and that it might be the time for the unique/lesser-known food/coffee-tea outlets to start gouging-out a few niches among the super-saturated franchises/chains... Surely there are interesting alternatives out there that can give the aging behemoths a run for their money... Any names? Ideas?

December 06 2012 at 3:10 AM Report abuse rate up rate down Reply
Jeffrey Kohut

It seems that most of the leading fast-food/comfort food/coffee-tea based franchises and company owned outlets (Starbucks) have reached saturation (in the US/Canada) and that it might be the time for the unique/lesser-known food/coffee-tea outlets to start gouging-out a few niches among the super-saturated franchises/chains... Subway seems about maxed-out, as does Dunkin' Donuts... Surely there are interesting alternatives out there that can give these aging behemoths a run for their money... Any names? Ideas?

December 06 2012 at 3:09 AM Report abuse rate up rate down Reply
bmarks56

Didn't Starbucks close several hundred retail locations about five years ago?

December 05 2012 at 4:26 PM Report abuse rate up rate down Reply
JC

What is the fascination with Starbucks? It's just not that good, and it's certainly not worth what they charge.

December 05 2012 at 3:32 PM Report abuse rate up rate down Reply
1 reply to JC's comment
Bill

Whenever an article comes up about Starbucks, as sure as the sun will come up tomorrow, somebody will ask that question. The obvious answer is that other people have a different opinion.

December 06 2012 at 5:46 PM Report abuse rate up rate down Reply