Starbucks to launch 30 Irish outlets

Coffee Chains: The US coffee giant is planning to open here later this year, writes Gretchen Friemann

Starbucks, the world's largest coffee chain, has commissioned a Dublin-based architecture firm to design 30 stores for what is expected to be its long-awaited launch into the Irish market later this year.

The multi-billion dollar giant plans to open its first outlet in Northern Ireland and then initiate a rapid roll-out of 29 coffee houses across the country. Mr Robbie Cohen, an architect with the award-winning firm Douglas Wallace, which was responsible for the cutting edge design of the five-star Morrison hotel, is drawing up the store blue-prints at the request of Starbucks' London office but declined to discuss the project due to a confidentiality contract.

The corporation's UK marketing director, Ms Cathy Heseltine, was also unavailable for comment. While Starbucks is understood to be only in the planning stages of its Irish launch, its enlistment of an architecture firm confirms years of speculation in the press that the Republic's accelerating café market is ripe for consolidation by a major international player. And they don't come any bigger than Starbucks. The coffee chain, whose green and white emblem is recognized in 32 countries, has recently pursued a relentless overseas expansion policy after its near saturation of the US market began to undermine its ability to grind out new profits.

Founder Mr Harold Schultz has grown the Seattle chain into a global network of 7,569 stores in just 17 years, but analysts argue Starbucks must aggressively export its concept overseas in order to duplicate the 20 per cent growth rate the company has averaged since it went public 10 years ago.

Last month, Paris became the latest city to feature on what The Economist magazine dubs its "lattenomics" scale which shows whether currencies are at their "correct" level against the dollar by comparing the cost of a Starbucks tall latte around the world. The French capital now ranks as one of the most expensive cities in the world to buy a Starbucks coffee with Bangkok qualifying as the cheapest place as the Thai currency is 31 per cent undervalued against the dollar.

Starbucks' arrival in the Republic is likely to be similar to its UK roll-out and involve a merger and acquisition of a local coffee chain, giving the company immediate market penetration and established cost-bases for a reduced capital outlay.

Not that Starbucks is known to stint on money when it comes to establishing its brand. The global giant paid a massive £49 million for 50 Seattle Coffee Company stores in the UK and reportedly buys up empty retail space in its main US centres simply to ward off competition. Its almost paranoiac level of cluster-buying prompted the US satirical magazine The Onion to quip in a headline: "A New Starbucks Opens in Rest-Room of Existing Starbucks".

Such hardball tactics are likely to shake-up retail rents here, which have already hit new highs in recent months as the consumer spending boom shows little sign of weakening. Whatever local company the coffee giant strikes a partnership deal with - the four leading brands are West Coast Coffee, Café Sol, Insomnia and O'Briens - it's likely to provoke a scramble for retail space as those sandwich and coffee houses left in the cold will have to claw back market share.

In England, Starbucks' second-biggest overseas market with over 310 stores, imitators are reportedly pushing the market to near saturation point to regain a critical mass and maintain profitability.