Starbucks, the coffee-shop chain that doubled its number of US stores in four years, will slow expansion as second-quarter earnings tumbled 28 per cent and customer visits declined.
“We think it is absolutely the most disciplined and prudent decision to slow the US growth down,” Howard Schultz, who returned as chief executive officer in January, said yesterday on a conference call with analysts.
In the first three months of 2008 its net income fell to $108.7m (£54.7m) down 28 per cent from the same period of 2007.
Starbucks plans to pare new US store openings through September by 155 cafes to 1,020. It will add 400 locations in each of the following three years, the Seattle-based company said.
The world's largest coffee-shop chain will turn instead to Canada, the UK, China and Japan to boost sales.
The "transformation," as Mr Schultz calls it, comes as cash-strapped US consumers facing record gasoline prices are pulling back on so-called affordable luxuries, including gourmet coffee.
Starbucks said it still plans to open 975 stores outside the US through September. US locations made up 11,434 of the company's 16,226 stores as of March 30th.
Bloomberg