Starbucks Plans To Open 500 New Stores In Middle East- Report

Starbucks Corp. SBUX plans to open approximately 500 new locations in the Middle East over the next five years.

This initiative is part of the Seattle-based company's strategy to bounce back from last year's difficulties, reported Bloomberg.

A noticeable decline in sales followed widespread boycott calls on social media platforms. People alleged the company supported Israel in the conflict with Palestine. Starbucks denied the claim.

The coffee chain giant plans to create about 5,000 new jobs as part of its expansion. It’ll also bring the total number of stores in the Middle East to over 1,800.

The announcement comes as Brian Niccol, who took over as the CEO last year, aims to reinforce Starbucks’ premium image.

Niccol’s plan to restore the company's identity as a community-focused coffeehouse includes taking into account the importance of comfortable seating and a clear separation between "to-go" and "for-here" services.

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Niccol, previously credited with revitalizing Chipotle Mexican Grill, Inc. CMG and Taco Bell, owned by Yum! Brands, Inc. YUM, is now Starbucks' fourth CEO in just two years.

Starbucks has been reeling with declining sales as customers have voiced concerns about rising prices, slow app orders, and disappointing food offerings.

To make matters worse, unionization efforts have gained momentum as employees express dissatisfaction with pay, benefits, and working conditions.

In response to the turnaround effort, the Starbucks reported first-quarter revenue of $9.4 billion and earnings of 69 cents per share, both well above the consensus estimates.

During the earnings call, Niccol highlighted the priority for international expansion as he mentioned that the company is actively looking for opportunities in China to drive sales growth in the region.

The Starbucks CEO also stated that while the company plans to reduce the number of new store openings in 2025, he anticipates strong demand for additional locations in the long run.

Price Action: SBUX shares are trading higher by 0.46% at $112.91 at the last check Friday.

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