Starbucks’ focus is growth
Starbucks Corp. Chief Executive Officer Howard Schultz is shifting the coffee seller’s focus from cost cutting to growth by promoting new products, including Via instant coffee and its Seattle’s Best Coffee brand.
“The future of the company is not based on cost takeouts,” Schultz said in an interview last week. “It’s based on innovation and the emotional connection and trust we have with our customers.”
Schultz, 56, plans to expand distribution of its instant coffee into grocery and drug stores and has signed an agreement to bring the Seattle’s Best brand to 9,000 Subway restaurants by the end of the year. Starbucks is looking to return to sales growth at established stores after four straight quarters of declines.
The Seattle-based company closed more than 900 stores to help trim $580 million in costs in the year ended Sept. 27. The drop in fourth-quarter comparable-store sales in the U. S. narrowed to 1 percent. Sales at domestic stores open at least a year fell 6 percent in the third quarter and 8 percent in the second, after tumbling 10 percent in the first.
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