Starbucks Plans To Have 55,000 Global Stores in Total by 2030

Starbucks has recently shared its plans for an ambitious global expansion that also aims to save the company costs.

Starbucks’ CEO, Laxman Narasimhan, declared the coffee giant’s intention to grow its international presence to 55,000 store locations by the end of 2030. The expansion strategy was revealed during the company’s 2023 “Reinvention Update and Holiday Launch” conference held this Thursday. Starbucks is no stranger to bold moves, and this plan solidifies its commitment to broadening its global impact.

The coffee powerhouse aims to establish itself in 35,000 locations outside of North America by the end of 2030, marking an addition of nearly 15,000 stores to its existing 20,200 international outlets as of Oct. 1.

“Three out of every four new stores over the near term is expected to be opened outside of the U.S. as our store portfolio becomes increasingly global.”

Michael Conway, president of Starbucks’ international and channel development divisions, via CNBC

In addition to this, Narasimhan outlined a strategy focused on financial efficiency, aiming to save more than $3 billion over the upcoming three years. This targeted cost-saving plan underscores the company’s pledge to further streamline its operations, enhancing profitability and shareholder value.

As the final part of its plan, Starbucks also declared a “Triple Shot Reinvention Strategy” that will substantially increase the hourly wages of its baristas. The goal is to double their fiscal 2020 earnings by the end of fiscal 2025. The wage increase will be achieved through a combination of higher pay rates and increased working hours. Further details about this plan are set to be disclosed next week.

This announcement comes on the heels of unionization efforts at over 350 Starbucks locations, as recorded by the National Labor Relations Board (NLRB). Despite these stores banding together under Workers United, Starbucks and the union have yet to finalize a collective bargaining agreement at any of the locations.

Both the union and the NLRB have accused Starbucks of violating federal labor law, citing instances such as alleged unlawful withholding of wage increases at unionized stores. Starbucks, however, has categorically denied all allegations related to union busting.

Starbucks Excels in Fiscal Sales Growth Results

Starbucks shared impressive fiscal fourth-quarter results on Thursday, outperforming Wall Street’s projections for both quarterly earnings and revenue. This led to a significant rise in stocks by 9.5%, effectively reversing earlier losses this year and boosting the company’s market cap to $115 billion.

The company’s “reinvention” initiative, introduced by former CEO Howard Schultz and currently under execution by Narasimhan, is reportedly progressing ahead of schedule. The plan largely focuses on simplifying operations and improving service speed and quality. Innovations include new coffee-making equipment, changes in store formats, and increased automation.

These developments are designed to address recent challenges, such as complex drink orders, increased use of the mobile app and drive-thru lanes, and the associated customer expectation for faster service. A new single-cup drip coffee brewer, part of this initiative, is now installed in over 600 Starbucks locations.

Starbucks also shared a fiscal 2024 sales growth forecast of 5% to 7%, slightly lower than last September’s projection range of 7% to 9%. However, all other fiscal targets for the upcoming year align with the previously announced plan.