Starbucks Will Join the 'Express' Movement
SEATTLE — Coffee giant Starbucks Corp. is adding two new store formats, including the upcoming launch of small-format express stores that are designed around offering convenience to customers. The other new format, Starbucks Reserve Roastery and Tasting Room, is meant to be an interactive, one-of-a-kind location dedicated to roasting, coffee education and increased availability of the small-lot Starbucks Reserve coffees.
The first express store is scheduled to open in New York City in early 2015. By investing in smaller, alternative store footprints, the company will address the increase in urbanization and decentralization of retail, according to the announcement.
Drive-thru stores currently account for more than 40 percent of Starbucks' U.S. company-operated stores and generate higher average sales growth than non-drive-thru stores, indicating there is significant opportunity to meet commuting customers in smaller experiences, the company stated.
"The evolution of our store experience is a direct reflection of how our customers are interested in both accessibility to the brand, as well as speed and convenience," said Cliff Burrows, group president, U.S., Americas, and Teavana. "Our scale affords us the unique opportunity to bring a flexible portfolio of options rooted in our core commitment to coffee quality."
The express stores will offer a concentrated set of beverage and food offerings, and integrate Starbucks' digital payment platform, including mobile ordering to increase speed of service. Growth of the company's digital payment applications and online presence will also help it to identify opportunities where store segmentation can support an enhanced physical and digital retail experience to expedite merchandise and at-home coffee purchases, or subscriptions for take-home or home delivery.
Meanwhile, the first 15,000-square-foot Starbucks Reserve Roastery and Tasting Room is set to open in Seattle in December. Designed to serve as an integrated coffee roasting, education and retail space, the location will let Starbucks double its small-batch roasting capacity and expand its Starbucks Reserve coffee presence from 800 stores to 1,500 stores globally by the end of fiscal 2015.
"Everything we have created and learned about coffee has led us to this moment. The Starbucks Reserve Roastery and Tasting Room is a multi-sensory experience that will transform the future of specialty coffee," said Starbucks Chairman, President and CEO Howard Schultz. "We plan to take this super-premium experience to cities around the world, elevating the Starbucks experience not only through these stores, but across our entire business."
Starbucks plans to create a specialized store experience devoted to highlighting its rare, limited-availability coffees in at least 100 locations over the next five years. These sites will benefit from ongoing new store development and renovation programs delivering an enhanced customer experience, the company said.
Starbucks is on track to open approximately 1,550 net new stores in fiscal 2014 and 1,600 net new stores in fiscal 2015. Nearly 300 net new company-operated locations will be in the United States.