Starbucks US stores will get US$450 million of investment as part of the Seattle-based cafe chain’s Reinvention strategy. The new plan will also boost the China business.
Starbucks plans more US store investment over the next two financial years, it revealed at its 2022 Investor Day. The firm is predicting a 7-9 percent rise in store sales growth by 2025.
Globally, Starbucks expects to reach 45,000 stores by the end of 2025, and is on track to hit a 55,000-store goal by 2030.
International outlets are accelerating growth for the firm and are expected to account for two-thirds of retail growth by 2025.
China footprint to grow substantially
In China, sales are expected to nearly double over the next three years. The business predicts a 50 per cent increase in stores as it aims to reach 9,000 outlets by 2025.
Licensed stores represent more than 50 per cent of the Starbucks International portfolio. In total, Starbucks has over 17,000 licensed stores including 6,500 in the US.
The cafe chain is unveiling a platform to help international stores provide a consistent digital experience for franchisees and customers.
Starbucks US ready to diversify
Customers can expect to see further diversification of the brand as Starbucks strives to respond to demand for convenience. Expanded formats across cafes, takeaway, delivery-only and drive-thru-only locations will sit alongside its digital channels.
In addition to purpose-built store concepts, Starbucks is also innovating and streamlining its beverage operations.
The new strategy will also see investment in recruiting, training, and onboarding staff to help franchisees.
Starbucks invests in franchisees
Starbucks in this financial year will invest in boosting franchisee support. Initiatives include wage innovation, well-being benefits, a partner app and the development of personalised career paths. There will also be investments in store managers, including new leadership training, scheduling tools, and career journey mapping.
These initiatives will be first implemented across the 9000+ company stores before a rollout of scalable best practice to other US and global stores.
Interim chief executive officer Howard Schultz said “As we execute on our Reinvention plan, we are building on our 51-year history of market leading innovation to position our business and our brand for the next chapter of growth.
“I am confident that our partners and world-class leadership team will capture the significant global growth opportunity ahead, unlocking value for all our stakeholders.”
The company expects to return about US$20 billion to its shareholders in the next three years through dividends and share buybacks.
Schulz used the Investor Day to introduce newly appointed Laxman Narasimhan to the extended business. Narasimhan takes over as CEO next year.
