Starbucks to Revamp European Stores

Coffee giant to open 300 new stores in the U.K. while rolling out localized offerings, such as lighter espresso in France and cheaper drinks in Greece.

March 05, 2012

LONDON - Starbucks is embarking on a multi-million dollar overhaul of its struggling European business, a move that could bring Starbucks?? drinks to aircraft, trains and vending machines, the Financial Times reports.

"In 2008 Starbucks?? U.S. business was not in good shape and there are similarities between where that was and where our business is in this region," said Starbucks chief Howard Schultz at a call-to-arms of European managers.

While sales and profits are on the rise for Starbucks in Europe, performance lags behind other markets.

The coffee giant plans to open 300 new stores in the U.K. over the next five years, up from 760 now. It is also looking to sell Starbucks products in non-traditional venues, such as on planes and trains.

"It??s no secret ... this is the toughest part of the world to operate in given the macroeconomic challenges," said Michelle Gass, Starbucks president of Europe, Middle East and Africa. "There??s a lot of fear out there so it??s going to be tough."

Starbucks will offer more localized offerings, such as a lighter espresso in France, cheaper drinks in Greece, and free second shots of espresso in lattes in the U.K., as a means to lure cash-strapped customers to its stores.

Schultz conceded that his recent focus on revitalizing U.S. sales contributed to Europe??s struggling performance. "From 2008 to 2010 my primary focus, and that of the leadership, was to strengthen and fix the U.S. business. We unfortunately were not able at the same time to focus on this region," he said.

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