Starbucks Expands Middle East Presence with Hundreds of New Stores
Starbucks Corporation is embarking on a major expansion in the Middle East, planning to open 500 new stores and create 5,000 jobs over the next five years. This move is part of the coffee giant's strategy to regain momentum in the region following challenges and consumer boycotts last year.
Starbucks currently operates over 1,300 stores in the Middle East. However, the company faced backlash in 2021 from consumers who accused it of not taking sufficient action to pressure Israel against its offensive in Gaza. These boycotts significantly impacted Starbucks' traffic and sales in the Middle East and also affected its US business.
"The boycotts were not based on anything accurate or true. We've never supported any militaries," said Starbucks CEO Brian Niccol in an interview with Bloomberg Television.
Niccol, who joined Starbucks in 2020, has been spearheading efforts to revitalize the coffee chain's growth, which has been hindered by boycotts, extended wait times, and consumer sensitivity to higher prices. He initially focused on restructuring the North American business, which accounts for approximately 75% of revenue, and has indicated plans for job cuts by early March.
Now, Niccol is shifting his attention to international markets. In addition to the Middle East expansion, Starbucks will add several thousand stores in China despite ongoing challenges related to economic recovery and increased competition. Bloomberg News has reported that the company is considering strategic options for its China business, including a possible stake sale.
Niccol recently visited China for the first time since becoming CEO. Starbucks' share price has risen significantly in 2023, boosted by the company's announcement in January that its sales decline has moderated. Niccol's initiatives are showing positive results, and the company is optimistic about its future prospects.