Starbucks plans for three-fold expansion

By Allison Linn
Associated Press

Starbucks' long-term plan calls for 25,000 locations worldwide as well as playing a role in the music industry. Advertiser library photo • November 2003

Starbucks is opening coffee shops at the rate of about 3 1/2 a day worldwide, and that figure could increase, chief executive Orin Smith told shareholders at their annual meeting this week.

The long-term plan is to have about 25,000 stores worldwide — more than triple the nearly 8,000 stores the coffee retailer has right now. And even that amount seems a little "light," according to Starbucks chairman Howard Schultz.

To accommodate those plans, the company, which already employs more than 80,000 people, is hiring 250 people a day, the executives told a packed house of thousands of shareholders.

"Both domestically and internationally, we probably underestimated the size of the global opportunity that we have," Schultz said in an interview after the meeting.

The Seattle-based company's aggressive expansion plans go far beyond just coffeehouses. Starbucks' future will include making money on everything from bottled coffee drinks — which the company hopes to start selling internationally within a year — to music, the executives said.

As is usual for Starbucks, the meeting was more show-and-tell than sales figures. Against a set built to look like the first Starbucks store at Pike Place Market in Seattle, Schultz started things off by conducting a band of percussionists — with Smith joining in on a massive pair of drums.

The crowd, which had feasted on pastries, lattes and other treats, was generally adoring, with one shareholder even suggesting that the crowd begin a cheer for the company.

But two shareholders berated the company for not offering dividends. Smith and Schultz both said that while Starbucks is considering such a plan, its current growth rate means the company may need any cash on hand.