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| Starbucks |
Starbucks Corporation (NASDAQ: SBUX) is an international coffee and coffeehouse chain based in Seattle, Washington. Starbucks is the largest coffeehouse company in the world, with 17,009 stores in 50 countries, including over 11,000 in the United States, over 1,000 in Canada, and over 700 in the United Kingdom.
Starbucks sells drip brewed coffee, espresso-based hot drinks, other hot and cold drinks, coffee beans, salads, hot and cold sandwiches and panini, pastries, snacks, and items such as mugs and tumblers. Through the Starbucks Entertainment division and Hear Music brand, the company also markets books, music, and film. Many of the company's products are seasonal or specific to the locality of the store. Starbucks-brand ice cream and coffee are also offered at grocery stores.
From Starbucks' founding in later forms in Seattle as a local coffee bean roaster and retailer, the company has expanded rapidly. In the 1990s, Starbucks was opening a new store every workday, a pace that continued into the 2000s. The first store outside the United States or Canada opened in the mid-1990s, and overseas stores now constitute almost one third of Starbucks' stores. The company planned to open a net of 900 new stores outside of the United States in 2009, but has announced 900 store closures in the United States since 2008.
Starbucks has been a target of protests on issues such as fair-trade policies, labor relations, environmental impact, political views, and anti-competitive practices.
The first Starbucks was opened in Seattle, Washington, on March 30, 1971 by three partners: English teacher Jerry Baldwin, history teacher Zev Siegl, and writer Gordon Bowker. The three were inspired by entrepreneur Alfred Peet (whom they knew personally) to sell high-quality coffee beans and equipment. The name is taken from Moby-Dick; after Pequod was rejected by one of the co-founders, the company was named for the first mate on the Pequod, Starbuck.
From 1971–1975, the first Starbucks was at 2000 Western Avenue; it then was relocated to 1912 Pike Place, where it remains to this day. During their first year of operation, they purchased green coffee beans from Peet's, then began buying directly from growers.
The Starbucks Center, Seattle. The company HQ, in the old Sears, Roebuck and Co. catalog distribution center building
Entrepreneur Howard Schultz joined the company in 1982 as Director of Retail Operations and Marketing, and after a trip to Milan, advised that the company should sell coffee and espresso drinks as well as beans. Seattle had become home to a thriving countercultural coffeehouse scene since the opening of the Last Exit on Brooklyn in 1967, the owners rejected this idea, believing that getting into the beverage business would distract the company from its primary focus. To them, coffee was something to be prepared in the home, but they did give away free samples of pre-made drinks. Certain that there was money to be made selling pre-made drinks, Schultz started the Il Giornale coffee bar chain in April 1986.
In 1984, the original owners of Starbucks, led by Jerry Baldwin, took the opportunity to purchase Peet's (Baldwin still works there). In 1987, they sold the Starbucks chain to Schultz's Il Giornale, which rebranded the Il Giornale outlets as Starbucks and quickly began to expand. Starbucks opened its first locations outside Seattle at Waterfront Station in Vancouver, British Columbia, and Chicago, Illinois, that same year. At the time of its initial public offering on the stock market in 1992, Starbucks had grown to 165 outlets.
The first Starbucks location outside North America opened in Tokyo, Japan, in 1996. Starbucks entered the U.K. market in 1998 with the $83 million acquisition of the then 60-outlet, UK-based Seattle Coffee Company, re-branding all the stores as Starbucks. In September 2002 Starbucks opened its first store in Latin America, in Mexico City. In August 2003 Starbucks opened its first store in South America in Lima, Peru. In November 2010, Starbucks opened the first Central American store in El Salvador's capital, San Salvador. On March 17, 2011 Starbucks opened its third restaurant in Central America and its first in Guatemala City , Guatemala.
In April 2003, Starbucks completed the purchase of Seattle's Best Coffee and Torrefazione Italia from AFC Enterprises, bringing the total number of Starbucks-operated locations worldwide to more than 6,400. On September 14, 2006, rival Diedrich Coffee announced that it would sell most of its company-owned retail stores to Starbucks. This sale includes the company-owned locations of the Oregon-based Coffee People chain. Starbucks converted the Diedrich Coffee and Coffee People locations to Starbucks, although the Portland airport Coffee People locations were excluded from the sale.
Many bookstores have Starbucks licensed stores within them, including Barnes & Noble in the United States, Chapters-Indigo in Canada (company operated), Livraria Saraiva and Fnac in Brazil and B2S in Thailand.
The Starbucks location in the former imperial palace in Beijing closed in July 2007. The coffee shop had been a source of ongoing controversy since its opening in 2000 with protesters objecting that the presence of the American chain in this location "was trampling on Chinese culture." Also in 2007, Starbucks cancelled plans to expand into India, but opened its first store in Russia, ten years after first registering a trademark there. In 2008, Starbucks continued its expansion, settling in Argentina, Bulgaria, the Czech Republic and Portugal. In Buenos Aires, the biggest Starbucks store in Latin America was opened. In April 2009, Starbucks entered Poland. New stores will be opened in Algeria. Starbucks has also opened its doors on 5 August 2009, in Utrecht, Netherlands. On October 21, 2009 it was announced that Starbucks will finally establish in Sweden, starting with a location at Arlanda airport outside Stockholm. On June 16, 2010 Starbucks opened its first store in Budapest, Hungary.
In May 2010, Southern Sun Hotels South Africa announced that they had signed an agreement with Starbucks that would enable them to brew Starbucks coffees in select Southern Sun and Tsonga Sun hotels in South Africa. The agreement was partially reached in order for Starbucks coffees to be served in the country in time for the commencement of the 2010 FIFA World Cup hosted by South Africa.
Starbucks is planning to open its third African location, after Egypt and South Africa, in Algeria. A partnership with Algerian food company Cevital will see Starbucks open its first Algerian store in Algiers.
In February, 2011, Starbucks officially started selling their coffee in Norway, but Starbucks never opened a shop there. Instead they supply Norwegian food shops with Starbucks.
In January, 2011, Starbucks and Tata Coffee, Asia's largest coffee plantation company, announced plans for a strategic alliance to bring Starbucks to India later that year. Starbucks plans set up stores in Tata retail locations and hotels in India, and also to source and roast coffee beans at Tata Coffee's Kodagu facility.
Some of the methods Starbucks has used to expand and maintain their dominant market position, including buying out competitors' leases, intentionally operating at a loss, and clustering several locations in a small geographical area (i.e., saturating the market), have been labeled anti-competitive by critics. For example, Starbucks fueled its initial expansion into the UK market with a buyout of Seattle Coffee Company, but then used its capital and influence to obtain prime locations, some of which operated at a financial loss. Critics claimed this was an unfair attempt to drive out small, independent competitors, who could not afford to pay inflated prices for premium real estate. In the 2000s, Starbucks greatly increased its "licensed store" system, which permits Starbucks licenses only if they contribute to less than 20% of the licensee's gross income, are inside other stores or in limited or restricted access spaces, as to not dilute the brand image. License agreements are rare in volume and usually only made with Fortune 1000 or similar sized chain stores. The licensed store system can create the illusion of 2 or more Starbucks cafes in the same shopping plaza, when one is a standalone company owned, and the others are licensed. The menus of licensed stores can be the same or trimmed or modified versions of the cafes, or be positioned as independent cafes that happen to sell Starbucks products (ex. Barnes & Noble).
