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Starbucks' Expansion Strategy Includes Cutting Down The Noise


Starbucks is serving up stores with less noise and more technology to go with your morning coffee as part of the company’s global expansion plans. 

The redesigned stores, encompassing new builds and those up for renovation, aim to save money and cater to clientele demand as the "Triple Shot Reinvention with Two Pumps" rollout goes full steam ahead, according to Bloomberg

The program, announced in November, focuses on brand elevation, global expansion and cutting costs by $3B. The company is putting $2B of that toward cuts "outside the store in cost-of-goods-sold," and is investing $450M into tech to improve efficiency and accuracy. 

The world's largest coffee chain's expansion plan would bring it from roughly 38,500 locations to 55,000 by 2030. During the first quarter of this year, the chain opened 549 new locations globally. Stateside, the retailer plans to bump up store count from 16,300 to 20,000. It plans to open around 650 stores in the U.S. this fiscal year.

To cut down on noise and make the pickup process more efficient, Starbucks is using digital status boards and ceiling baffles. To improve the output speed of cold drinks, a tech-based "Siren System" is being incorporated into 500 U.S. stores this year, Bloomberg reported. 

The coffee chain plans to include the ceiling framework in new stores and about 1,000 U.S. locations that are up for renovation this year. 

About 80% of the locations opening in the U.S. this fiscal year will have drive-thrus to capitalize on a pandemic-initiated trend of online orders. Some locations will solely operate as pickup or drive-thru, Sara Trilling, president of Starbucks North America, told Bloomberg. 

The retailer reported $7.1B in revenue in Q1, a 9% increase year-over-year. Despite market headwinds, Starbucks' brand and reinvention program "will drive balanced and attractive earnings growth," Chief Executive Laxman Narasimhan said on an earnings call.

Related Topics: Starbucks, retail