Starbucks (Nasdaq: SBUX) Plans Acquisitions For Expansion
Wednesday, December 01, 2010 3:06 PM

The world's largest retailer of coffee Starbucks Corporation (NasdaqGS: SBUX) plans to expand its grocery business with fresh acquisitions. According to CEO Howard Schultz, the company plans to acquire both large and small companies to help increase sales of bagged coffee and other consumer products beyond its cafes. It planned to open a net of 900 new stores outside of the United States in 2009. Earlier in January, the company had laid down its policy on entering the Indian market.

Starbucks announcement helped it to have a positive start in the Stock Exchanges on Wednesday. Stocks of the company were valued at $31.59 in the morning trading, a gain of 3.16 percent above its last day closing.

Schultz said that the company plans to sell more of its branded products including packaged coffee and tea, bottled drinks, Via instant coffee and ice creams. He said that Starbucks will aim at improving margins in its international cafe business and attract more consumers during the afternoon and evening hours. He asserted that the company's Tazo tea business has the potential to grow if new investment is made into this business.

Starbucks, headquartered in Seattle, doubled its profit in the fiscal year ending on October 3, 2010. Company's sales rose by 10 percent with about $1.6 billion in assets. The contribution of packaged goods accounted for 7 percent in Starbuck's revenue of $10.7 million. The company is expected to lay down its plan for the 400 new international locations and 100 new cafes planned in the United States for its next fiscal year.

The company is targeted in the past on issues such as fair-trade policies, labor relations, environmental impact, political views, and anti-competitive practices, had recently accused Kraft Food Inc (NYSE: KFT) of multiple contractual breaches, which include mismanaging grocery sales.



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