Four years ago, it appeared that no one on Earth was going to be able to buy a cup of coffee without the Starbucks brand on it. SBUX had nearly 6,500 retail locations worldwide, and they were on track to buy out almost all of their major competitors. They purchased the Seattle’s Best Coffee chain from AFC Enterprises (AFCE) and all of the West Coast based Coffee People stores from Diedrich Coffee (DDRX). Not all was well though. First, in 2007, Starbucks halted its plans to expand into India. They continued to expand internationally in 2008, opening outlets in Agentina, Portugal, and the Czech Republic, but closed 900 underperforming retail locations throughout that year and into 2009. SBUX stocks hit all time lows in March 2009.
Their recovery in 2010, however, has been dramatic. Shares are up +240% since those lows last year, and SBUX stock is up nearly 22% year-to-date. Now that the coffee retailer is recovering from the economic downturn, it appears that they are looking to resume their expansion across the globe. Starbucks opened their very first retail location in Budapest, Hungary on Wednesday. The location is the fruit of Starbucks’ ongoing partnership with Poland-based AmRest who also run Yum! Brands (YUM) fast food chains Pizza Hut, KFC, and others throughout Europe. The Budapest location will offer a full line of local fare, including Pick Salami Sandwiches and Sausage Sandwiches, as well as confections provided by Hungary’s famous Gerbaud Confectionary. It’s doubtful that Starbucks will look to acquire the Confectionary’s Café Gerbaud locations in both Budapest and Tokyo.
That Starbucks is showing signs of resuming their expansion into European and Asian markets is good news for both current SBUX shareholders and potentially interested buyers. While there is no word on whether or not they will resume their efforts to open locations in India, it’s a strong possibility the company will want to tap into that country’s still-growing white-collar consumer base.
Starbucks also made headlines earlier this week when they announced their new digital initiative. Starbucks will be offering free Wi-Fi internet access at all their locations in the United States starting in July. Longtime partners AT&T (T) will be providing the service. SBUX will also launch the Starbucks Digital Network, a web-based service produced in conjunction with Yahoo! (YHOO), that will provide exclusive access to paid content from News Corps (NWS) properties like The Wall Street Journal as well as Apple Inc‘s (AAPL) iTunes.
As of this writing, Anthony Agnello did not own a position in any of the stocks named here.
