Starbucks Going Global Fast

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The Starbucks coffee shop on Sixth Avenue and Pine Street in downtown Seattle sits serene and orderly, as unremarkable as any other in the chain bought 15 years ago by entrepreneur Howard Schultz. A little less than three years ago, however, the quiet store-front made front pages around the world. During the World Trade Organization talks in November, 1999, protesters flooded Seattle’s streets, and among their targets was Starbucks, a symbol, to them, of free-market capitalism run amok, another multinational out to blanket the earth. Amid the crowds of protesters and riot police were black-masked anarchists who trashed the store, leaving its windows smashed and its tasteful green-and-white decor smelling of tear gas instead of…show more content…
Amazingly, with 4247 stores scattered across the United States and Canada, there are still eight states in the United States with no Starbucks stores. Frappuccino-free cities include Butte, Mont., and Fargo, ND. But big cities, affluent suburbs and shopping malls are full to the brim. In coffee-crazed Seattle, there is a Starbucks outlet for every 9400 people, and the company considers that the upper limit of coffee-shop saturation. In Manhattan’s 24 square miles, Starbucks has 124 cafes, with four more on the way this year. That’s one for every 12000 people – meaning that there could be room for even more stores. Given such concentration, it is likely to take annual same-store sales increases of 10 per cent or more if the company is going to match its historic overall sales growth. That, as they might say at Starbucks, is a tall order to fill. Indeed, the crowding of so many stores so close together has become a national joke, eliciting quips such as this headline in The Onion, a satirical publication: ‘A New Starbucks Opens in Restroom of Existing Starbucks.’ And even the company admits that while its practice of blanketing an area with stores helps achieve market dominance, it can cut sales at existing outlets. ‘We probably self-cannibalise our stores at a rate of 30 per cent a year,’ Schultz says. Adds Lehman Brothers, Inc. analyst Mitchell Speiser: ‘Starbucks is at a defining point in its growth. It’s reaching a level
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