March 1, 2024

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Starbucks unveils expansion plans, cost cutting

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Starbucks cups are pictured on a counter in Manhattan, New York, on Feb. 16, 2022.

Carlo Allegri | Reuters

Starbucks on Thursday presented the latest stage in its plan to drive growth for the company, which involves accelerating its global footprint and saving $3 billion in costs over the next three years.

The company said it plans to expand to 35,000 locations outside of North America by 2030. Starbucks currently has roughly 20,200 international cafes, as of Oct. 1. In total, the coffee giant aims to reach 55,000 locations globally by 2030, up from its current count of more than 38,000.

“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, said during a company presentation.

Starbucks also announced a $3 billion cost-savings plan. Executives said $1 billion of those savings will come from making its stores more efficient. The rest will come from saving on its cost of goods sold.

The final piece of what Starbucks called its “Triple Shot Reinvention Strategy,” announced Thursday, calls for wage increases for baristas, doubling their hourly income over fiscal 2020 earnings by the end of fiscal 2025. That jump will come from both increased hours and higher pay. Starbucks said it would share more details next week.

The announcement comes after more than 350 Starbucks locations have unionized under Workers United, according to National Labor Relations Board data. Starbucks and the union have not yet reached a collective bargaining agreement at any of those locations, and both the union and the NLRB have accused Starbucks of breaking federal labor law, including illegally withholding wage hikes at union stores. The company denies all allegations of union busting.

Momentum brewing

Earlier Thursday, the company reported its fiscal fourth-quarter results. Starbucks beat Wall Street’s estimates…

2023-11-02 17:44:34

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