Starbucks Upscales With Princi Bakeries

The Wall Street Journal: “The opening of luxury Italian bakery Princi inside Starbucks’s Seattle Reserve Roastery is one way the coffee giant is seeking to differentiate itself. Starbucks last week reduced its long-term sales and profit growth outlook due to the difficult retail environment. Howard Schultz, who stepped down as chief executive in April to focus on developing high-end coffee shops within the company, said Starbucks needs to create another brand tier to appeal to more affluent consumers.”

“Mr. Schultz said he envisions including Princi bakeries inside all of the Roastery shops the company plans to open globally. Roastery sales still are too small of a contributor to move the needle for the company’s earnings. But the average transaction in the Seattle Roastery—a tourist destination—is $20, compared with $5 at a traditional Starbucks, Mr. Schultz said.”

“Starbucks said it is also planning to open 1,000 standalone Princi bakeries around the world, with hundreds in the U.S., serving small-batch Starbucks “reserve” coffee.”

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