Starbucks Corporation (ticker: SBUX) is eyeing even more expensive coffee offerings for 1,000 new upscale stores.
If the project of CEO Howard Schultz — who will shift to an executive chairman role in April — takes off, the coffee chain might just become what some millennials desire, reports Reuters.
This all, of course, comes as competition swirls in the industry with further penetration of the likes of Blue Bottle and Intelligentsia in the U.S. Reuters points out that Starbucks must stand out from these competitors to do away with a “pedestrian” moniker.
But Starbucks is putting its coffee where its mouth is, so to speak. Schultz is leaving the CEO role so that he can put his energy toward developing 1,000 “reserve” brand locations. Plans also include up to 30 Reserve Roastery and Tasting Rooms all over the world that will serve as showcases.
Will these “reserve” locations, however, garner the attention they seek? Reserve bars have appeared in a number of Starbucks locations, and one in New York was charging $10 for coffee produced in a glass siphon. What’s more, reserve stores will feature “exotic, small-lot coffees” in 8-ounce bags that could be sold for $50.
Bernstein analyst Sara Senatore told Reuters these stores could raise revenue for the company pending it meets targets, though noted an economic slowdown might make its investment requirements not as alluring.
Meanwhile, the CEO role will go to Starbucks President Kevin Johnson. As The Wall Street Journal points out, this type of arrangement is atypical for U.S. business. The departing CEO’s role usually involves up to just a year-long chairman position during the transition — and that’s if they were effective.
More details about the company’s changes and plans have been pouring out on Twitter during Starbucks Investor Day, including five-year company growth targets in addition to “Reserve” updates.
Schultz makes it clear he’ll stay at $SBUX but on projects. Intro 4 Kevin Johnson: “He is going to be the CEO. He’s got the last word.”
— Jessica Wohl (@jessicawohl)
Average ticket in Roastery 4x average ticket in @Starbucks store — Schultz (Bet it’s also higher margin)
— Stephanie Strom (@ssstrom)
Liz Muller, SVP $SBUX creative, global design outlines Reserve stores. NY’s, opening in 1.5 yrs, features 45-ft spirit, mixology bar
— Victoria Craig (@VictoriaCraig)
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Starbucks Corporation (SBUX) To Charge $10 for Coffee in ‘Reserve’ Stores originally appeared on usnews.com
