19 October 2018

Starbucks licenses stores and expands self-serve to boost European growth

World’s largest coffee chain announces intention to fully license operations in France, the Netherlands, Belgium and Luxembourg to Mexico-based restaurant chain operator, Alsea amid major shake-up of European operations intended to improve flattening sales


The proposal will see Alsea acquire 83 Starbucks-owned stores in the Netherlands and France and take control of a further 177 franchised stores across the four markets, including Belgium and Luxembourg. Alsea already operates more than 900 Starbucks stores in Mexico and South America and will attain rights to operate and develop the US coffee chain’s stores across the four European markets.

Starbucks is embarking on a major restructure of its European operations to reverse flattening sales and stagnant growth. The world’s largest coffee chain has also announced the closure of its Amsterdam-based support centre, which will be integrated into its existing European headquarters in London – a move expected to impact around 186 staff according to a Reuters report. Starbucks will, however, continue to operate its manufacturing site in Amsterdam, which serves its 2,400+ European store portfolio.

“These strategic moves will enable us to further accelerate growth across these markets as we position Starbucks for long-term success moving forward,” said John Culver, group president, Starbucks International, Channel Development and Global Coffee & Tea.

Allegra research indicates cooling consumer appetite for large branded coffee shop chain concepts in Europe, which face increased competition from a growing gourmet vending machine sector and an innovative crop of experience-focused boutique chains. Starbucks' extension of a licensing agreement with Swiss vending services supplier Selecta suggests the Seattle-based firm sees growth potential in the self-serve sector, which includes offices, universities and hospitals. The terms of the deal grant the Swiss firm rights to develop and operate Starbucks’ premium self-serve concept; ‘Starbucks on the go’ across 14 European markets.

Major European coffee brands have ratcheted up competition in the self-serve coffee sector in 2018, with Italian coffee giant, Lavazza, acquiring Mars Drinks' coffee vending business to bolster its European and US presence in October. In the UK, Costa Coffee already operates more than 8,000 ‘Express’ self-serve machines, while low-cost competitor easyCoffee has announced the expansion of machines alongside its UK-based store portfolio.
 
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