Starbucks will add more than 20,000 stores worldwide over the next 10 years. Starbucks chose a more aggressive management strategy amid increased non-face-to-face consumption in the wake of COVID-19 pandemic. There are also concerns that Starbucks’ expansion strategy will put smaller coffee shops in more trouble.
According to Bloomberg News (12/9), Starbucks CEO Kevin Johnson said at the “Investors’ Day” event that day that he would increase the number of stores worldwide to 55,000 by 2030. Currently, Starbucks has about 33,000 stores.
Chief Executive Officer Kevin Johnson said, “We are well positioned to invest in the right areas to strengthen our competitive advantage and drive consistent, sustainable growth for decades to come.”
Starbucks key of 55,000 stores goal confidence: fast recovery after COVID-19
Starbucks’ faster-than-expected recovery since the COVID-19 incident this year also played a positive role in expanding its stores. Although its third-quarter earnings fell 38 percent year-on-year, it expects sales to recover to $6.2 billion in the fourth quarter of this year. From fiscal 2023, Starbucks also predicted annual sales growth of 4-5 percent in the U.S. and around the world. While sales in China will rise by up to 4 percent.
Wall Street believes that Starbucks is taking a more dominant position in the market through the COVID-19. And expects its expansion strategy to further solidify its position. Starbucks shares jumped 80 percent to close at $100.40 a share recently. After falling to the $50 per share level during the COVID-19 pandemic in March. The market capitalization of Starbucks stood at $117.839.5 billion.
Smaller cafes around the world, on the other hand, are on the verge of extinguish because of Starbucks’ aggressive sales strategy. “Individual-run cafes cannot keep up with capital forces like Starbucks,” said RJ Hottobi, a stock strategist at Morningstar. According to Euromonitor, a market research firm, more than 2,000 coffee shops are expected to disappear in the U.S. alone this year due to the influence of COVID-19. Coffee shops in the form of companies are also in crisis.
“Starbucks is one of the few large companies that can achieve double-digit growth since 2022,” said RBC Capital Market, a global investment bank.
