World’s biggest coffee company Starbucks Corporation (SBUX) recently announced its long-term objectives pertaining to store expansion and growth strategies for each of its segments; its entry into the tea industry and its initiatives to boost consumer relations. The company plans to take the following steps to ensure growth in the upcoming fiscal years.
Segment Specific Plans
The Americas business has witnessed a substantial turnaround since the last couple of years. The segment witnessed 9% growth in net sales to $2.5 billion in the fourth quarter of 2012, driven by 7% growth in same-store sales and new store openings.
The company intends to open more than 3,000 new stores and remodel many more in the next five years in order to capitalize on the strong demand for Starbucks products in America. By the end of 2013, Starbucks customers in the U.S will be able to enjoy La Boulange products and Evolution Fresh juices in company-operated stores.
Starbucks has also been witnessing strong performance in the China-Asia-Pacific (CAP) segment. In fact, net revenue grew 28% in the fourth quarter of 2012, driven by a 10% rise in same-store sales and new store openings. China, Thailand, Singapore and Australia all posted strong performances.
The company believes China will become its second-largest market by 2014, surpassing Canada. The segment will have 4,000 stores by the end of 2013, of which 1,000 will be in Mainland China, 1,000 in Japan and 500 in Korea.
China is one of the most important markets for Starbucks and the company plans to have 1,500 stores in 70 cities in 2015. Starbucks has opened its first three stores in India and plans to open a fourth store in early 2013. The company also intends to open its first store in Vietnam.
Europe, Middle East and Africa segment witnessed a 2% decline in net revenue to $283.7 million in the fourth quarter of 2012, hurt by flat traffic and currency headwinds. However, revenue and profit is expected to...
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