Moderation in All Things, Save Starbucks

Jul 24, 2002
George Anderson

An article in the July issue of Business 2.0 ponders when Starbucks’ growth rate might slow. The numbers argue that it might not be soon, say staff members. In San Francisco, there are now more Starbucks outlets than publicly traded Internet companies.

Since 1987, Starbucks has added new outlets faster than any other quick-service franchise, including McDonald’s. Although ubiquitous in some U.S. metro areas, the coffee chain is still a novelty in most of the country. Morgan Stanley’s Michael Sherrick estimates that the company could more than double its U.S. outlets without impeding growth. The “saturation point,” he says, might be reached at a little more than three stores for every 100,000 residents nationwide.

Analysts see Starbucks’s most inviting growth opportunity in international markets, particularly Europe, which boasts some of the world’s heaviest coffee drinkers but few Starbucks outlets as of yet.

Moderator Comment: How much Starbucks is too much?

The laws of nature do not allow for never-ending growth. That said, Starbucks has a long way to go before the brand reaches its saturation point. [George Anderson – Moderator]

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