Reduced U.S. Store Growth..... SBUX significantly reduced its previously announced U.S. store opening target for fiscal '09, down to 250 net new company-operated stores and less than 400 in total U.S. store openings. The benefit to the P&L will be improving ROIIC and reduced cannibalization of existing stores.
Free Cash Flow..... Over the next three years, SBUX will generate $4.4 billion in CFFO and have 2.4 billion in capital expenditures, leaving over $2 billion cumulative free cash flow. This compares to cumulative free cash flow of about $800 million from fiscal '06 to fiscal '08.
Improving the Four Wall Experience:
1. In February SBUX took the first step with an Espresso Excellence Training which was designed to improve the customer experience.
2. April 8th, SBUX introduced the new everyday brewed coffee Pike Place Roast
3. SBUX will be remodeling stores with the next generation of espresso machines exclusive to Starbucks - the Mastrena
4. SBUX will introduce the Clover into its U.S. store base. The Clover's specialized brewing process blends the best of the vacuum pot and coffee press methods and further develops and unlocks the unique flavor nuances of specialty coffee.
5. SBUX will introduce the Starbucks Card Rewards program which will allow the company to explore ways reward loyal customers.
1. The company will enter the energy beverage category through the Starbucks DoubleShot platform. Other entrants into this space have used caffeine as a supplement within their energy beverages, which makes Starbucks a natural. SBUX will leverage the assets of the JV partnership with Pepsi-Cola to expand Starbucks DoubleShot platform. This new platform will include both customizable, handcrafted beverages and RTD beverages.
2. SBUX will broaden its offerings into the health and wellness category. This summer, SBUX's first step is with a protein and fruit blended beverage which is made from simple ingredients that provide the benefit of sustained energy. This new beverage will be initially available in two flavors and will include fresh fruit and a proprietary whey protein, with no artificial sweeteners, delivering 15 or more grams of protein, with no more than 270 calories.
3. With an Italian heritage, SBUX will has developed (through a partnership with an Italian supplier) has a new category of frozen beverages.