Starbucks Reserve: A New Concept

The first store will open in the West Loop area of Chicago with $10 coffee drinks and food as a mainstay on the menu.

Most U.S. products and services have at least two names that dominate their industries: think Ford and Chevrolet, Coca-Cola and Pepsi, Hertz and Avis. But when you think coffee shops, only one name pops up: Starbucks.

Being the dominate company in serving coffee to the public can be a good and a bad thing. Good is less competition to worry about. The bad aspect is reaching saturation to the point you need to continually bring ideas and products forward to maintain the 
loyalty and interest of your customers.

Starbucks has been an innovator of new ideas from the very beginning of the journey to their phenomenal success. Never one to sit on their laurels, the company is ready to launch a new kind of Starbucks coffee store aimed at capturing a more elite-class of customer. 

Named Starbucks Reserve, the first store will open in the West Loop area of Chicago with $10 coffee drinks and food as a mainstay on the menu. This location and a second Starbuck Reserve in Seattle are both scheduled to open in the second half of 2017.



Corporate planners expect to eventually open 1,000 Reserve cafes around the world in addition to a line of Reserve Bars which serve exotic, small-batch blends of coffee. In addition, 20 to 30 Roasteries are planned to open in tourist-friendly areas and will serve expensive drinks like the $10 Nitro Cold Brew Float. 

The new Reserve stores will be roughly 3,000 to 4,000 square feet, twice the size of a conventional Starbucks. These stores will use creative designs that fit the area they are located in and will include a menu of foods like pizza, pastries and salads made fresh in-house along with their line of more expensive coffee and alcoholic drinks.

Estimated sales at the Reserve stores are penciled in at approximately $3 million, twice the annual amount generated by the average Starbucks store today. If the Reserve meets that $3 million forecast, it would place them in second place as the most profitable restaurant chain by average sales per unit behind Chick-fil-A’s $4 million number.

To make those numbers, Starbucks hopes to copy the success of their chain of Seattle Roastery stores which some describe as the "Willy Wonka of coffee." Two words that Starbucks is using to describe their new Reserve stores are “premium” and “upscale,” things you’d expect to see for a $10 cup of coffee. 

As of November 2016, Starbucks has 23,768 locations worldwide. Over 13,100 stores are located in the United States with another 10,000 units located worldwide in China, Canada, Japan, South Korea and in various European countries. With the major U.S. market areas nearing saturation, the implementation of Starbucks Reserve stores allows the company to appeal to a newer customer base without stealing clients from the regular Starbucks stores. 

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