(Reuters) - Starbucks Corp, the
world's biggest coffee chain, is hoping to boost growth in Europe, the Middle
East and Africa by opening so-called concept stores that tailor products and
cafe interiors to local tastes, a senior manager told Reuters.
Starbucks will open between five
and 10 such stores in the region this year, Rich Nelsen, senior vice president
for Starbucks' Europe, the Middle East and Africa (EMEA) business, said in an
interview.
Those cafes will test new
products, such as fresh-baked pastries, as well as exclusive coffees from
small-scale farms,
"If these new products and
the other concepts we test here work, we will expand these to other
countries," he said.
On Friday, Starbucks will open
its first European concept store in Amsterdam, followed by one in Kuwait later
this year.
Concept stores test new Starbucks
products and sales ideas while their design and interior are inspired by the
particular city and country where they are located.
The store in Amsterdam will be
its biggest in Europe at 430 square meters. Apart from its larger size and
assortment with 16 new food products that are only sold here, the new concept
store stands out because of its design.
Located in a former bank
building, it will have locally sourced secondhand furniture and feature typical
Dutch touches, such as stools resembling bike saddles and traditional Dutch
blue and white tiles.
"After opening this store
our other stores in Amsterdam will get busier too because it creates
conversation and makes more people learn about us," Nelsen said.
Starbucks chose Amsterdam as the
location for its concept store because it is where both its EMEA regional
office and its roasting plant for the European market are located.
"The easy access to the
city, its large international community and its important coffee heritage also
plays a role," Nelsen added.
Dutch traders started bringing
coffee to Europe in the 18th century, using Amsterdam as a distribution centre.
The region has remained an important centre for coffee roasting ever since.
During the latest quarter,
Starbucks reported 17 percent revenue growth for the EMEA region, which
accounts for a little less than 10 percent of overall revenue.
But operating margin contracted,
due to higher distribution costs related to moving to a consolidated
distribution centre in its UK market.
Starbucks said it was not meeting
internal targets in Europe - where debt worries and high unemployment weigh
heavily on consumers - and promised to improve results there.
Starbucks hopes to reap benefits
from retraining staff - an effort that helped reinvigorate the company's U.S.
operations - as well as tailoring products to local needs, Nelsen said.
"In the UK we decided to
make our latte coffee stronger to adjust to local taste, while we started
offering two different espresso coffees in France for the same reason," he added.
Unlike in the United States, it
is not planning to shut down underperforming stores in EMEA to improve
performance, he said.
Starbucks plans to open 100 new
stores in EMEA this year and will put a special focus on Scandinavia, where it
has a relatively weak presence, Nelsen said.
Starbucks currently operates
roughly 1,700 stores in the EMEA region.
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Reporting
by Tjibbe Hoekstra; Editing by Mark Potter