Starbucks Coffee, sometimes known as Fourbucks Coffee is definitely the largest coffeehouse chain in the world. It opened its first store in 1971 in Seattle’s waterfront Pike Place Market by three partners: Jerry Baldwin, Zev Siegel, and Gordon Bowker to promote high-quality coffee beans and equipment. In 1982, Howard Schultz, the current Chairman and Chief executive officer joined the company as the Director of advertising. He was surprised by the recognition of the espresso bars in Italy after he traveled to Milan in 1983. Back to the US, he convinced the founders of Starbucks to sell both coffee beans and espresso beverages. However, the concept was rejected so he left the company and founded Il Giornale coffee bar chain in 1985. In 1987 Howard Schultz and Il Giornale bought Starbucks Hours Saturday with $3.8M and renamed Il Giornale coffee bars to Starbucks and turned it in to the Starbucks you know today. The company went public with the symbol SBUX in June 26, 1992 at $17/ share with 140 stores. Since then the stock has split 5 times. As of May 2008, SBUX is traded at about $16, down from the high of $39.43 in November 2006.
Starbucks opened the first overseas store in Tokyo, Japan in 1996. The company currently has about 16,000 stores, employs 172,000 partners, AKA employees as of September 2007 in 44 countries. It has annual sales well over $10B with most recent quarterly revenue being $2.526B. About 85% of Starbucks revenue arises from company-operated stores.
Starbucks will not franchise its operations and it has no plans to franchises in near future. In North America, most stores are company-operated. You may see some Starbucks stores inside Target, major supermarkets, University campuses, Hospitals, and Airports. These stores are operated under licensing agreements to provide use of property which may otherwise unavailable. Starbucks receives licensee fees and royalties from these licensed locations. At these licensed retail locations, the staff are considered employees of the specific retailer, not Starbucks. Since 2008 it has 7087 company-operated stores and 4081 licensed stores in america. Internationally it provides 1796 company operated stores and 2792 joint-venture or licensed stores in 43 foreign countries. The pace of expansion is slowing down because the company intends to open 1020 US stores in 2008, under 400 stores in 2009 down from 1800 stores in2007. In addition, additionally, it wants to close 100 stores in 2008.
Recession-sensitivity: a hungry man can survive with a Big Mac & fries but can live with no four-buck Frappuccino. What this means is What Time Does Starbucks Open Today is extremely understanding of economy downturn as observed in 2007 and 2008 compared to Burger Kings and McDonald’s. This may be the main reason sales at stores in the US open at the very least per year are anticipated a mid single-digit percentage decline, the very first drop ever. It triggers Howard Schultz to go back to the CEO post. The company wants to double its marketing spending to $100M in 2008 to drum up sales. It began an aggressive coupons campaign offering free drinks every Wednesday through May 28, 2008. This may be considered a sign of desperation. On April 22, 2008 Starbucks cut its outlook for your year citing weak economy.
Calorie & Sugar: Starbucks drinks have more sugar and calorie by which people are a lot more concerned due to explosion of obesity and diabetes epidemic in america. For instance, its Strawberries & Crème Frappuccino® Blended Crème – whip has 120 grams (over 1/4 lb) of sugar, and 750 calorie on its Venti 24 oz size. When it becomes a trend that consumers decide to cut down on the sugar drinks, or stick to low-carb diets this will have influence on Starbucks revenue.
Competition: McDonald’s, Wendy’s and Dunkin Donuts now offer espresso at lower prices to contend with Starbucks. They are going to capture some revenue from Starbucks, especially from cost-conscious customers. The pvmpqb Starbucks prices are already pretty high; it’s very hard for Starbucks to boost the prices in the future without affecting the targeted traffic to its stores.
High-expenses business structure: while Starbucks profit margin is high as it pays a typical $1.42 per pound for the unroasted coffee, its company is very labor intensive just like any other foods businesses. It will take between 10-20 employees to operate one store. All eligible part-time and full-time partners in the united states and Canada receive benefit package consisting of stock option plan, 401k with company matching, medical, dental & vision coverage. Starbucks is voted as the 7-th best company to work for in the united states in 2008 by the Fortune magazine employee’s survey. What is good for employees may not be beneficial to the employers. These benefits are normally only available to key employees or managers inside the restaurant industry. Historically, the expenses of these health advantages rise faster compared to rate of inflation. Within the long run, they may have negative influence on Starbucks bottom line. Should Starbucks Corporate Office Address not perform well, it may be under pressure as being a public company to close more stores.