Starbucks Promises More Stores

Casey called Starbucks' worldwide potential for growth "greater today than it has been at any time in the history of the company," pointing out that the chain already operates nearly 9,500 stores in 35 countries, serving approximately 33 million customers per week worldwide. New stores "continue to be the primary driver behind our revenue growth," according to Casey, who said Starbucks expects to end 2005 with more than 10,000 stores. "We have the capability to continue to add stores in the future at an even more rapid pace" than this year, Casey said.

This year's pace has added 912 new locations to date and will result in 1,500 new stores by the end of the fiscal year. "This equates to a little more than four stores per day, seven days a week, 365 days a year," the Starbucks CFO noted. He said the 2005 new store openings represented an increase of about 150 stores, or 12% more, than the openings in fiscal 2004, and he said the company expects to raise the new store opening pace again in 2006.

Casey and Jim Donald, Starbucks president and CEO, both discussed some of the ways in which Starbucks expects to expand. Casey pointed out that in addition to adding stores, the company sees potential in ready-to-drink products, food-service and grocery chains, and branded consumer products. Donald listed the types of locations in which Starbucks sees the potential for growth: new and existing markets, small metropolitan statistical areas, continued in-fill and off-highway sites, urban neighborhoods, stores within stores and adding to the company's licensee group.

Regardless of how and there the company expands, Donald said, "We have no intention of changing the course that we're on. The company will continue to focus on the same things that we have focused on: a premium hand-crafted beverage, legendary service and the Starbucks experience."

Casey also detailed the financial results of Starbucks' continued expansion, which has delivered 161 consecutive months of positive same store sales growth.He pointed out that comparable store sales growth has never dipped below 5% in the 13 years that Starbucks has been reporting as a public company. "These results are even more impressive when you consider how rare it is to even record back-to-back 5% same store sales growth among restaurants and retailers," Casey said. "To the best of my knowledge, 13 consecutive years of greater than 5% same store sales growth is unprecedented."