Business

Why Starbucks Wants To Focus On Upscale And Smaller Stores

Starbucks on Friday announced it will introduce two types of retail locations: an upscale roastery and smaller, alternative stores for convenience.

Why Starbucks Wants To Focus On Upscale And Smaller Stores
Getty Images / Melanie Conner
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As Starbucks looks to expand its ever-growing retail business, the company’s deciding its best bet is to head in two directions.

First, Starbucks is setting its sights on an upscale experience with the introduction of its 15,000 square-foot Starbucks Reserve Roastery and Tasting Room. 

The company says the retail location will feature “roasting, coffee education and increased availability of their fast-growing, highly successful small-lot Starbucks Reserve coffees.”

Starbucks Reserve is the company’s premium line of rare, small-batch coffee varieties.

By creating this dedicated space, the coffee company says it will be able to double its roasting capacity. In other words, Starbucks will be able to offer up more of its small-batch, limited-run coffees.

USA Today quotes a company spokesperson who says the coffee company “hasn't yet decided what its Reserve menu will be.”

On the other end of the spectrum, Starbucks says it will also be focusing its attention on “smaller, alternative store footprints.” 

The Wall Street Journal notes these smaller stores will have a more focused menu, allowing the locations to focus on speed and convenience. The outlet says Starbucks is expected to rely heavily on its digital payment and mobile ordering services.

The company says there’s money to be made from drive thru stores, because sales growth has been “higher than average” at those locations.

Fortune suggests the company is preempting the retail and in-store traffic declines larger companies are currently experiencing. "Wal-Mart and Best Buy have opened smaller stores in recent years ... it is notable [Starbucks] is thinking about how it can bolster sales at stores that are meant to serve customers at a faster pace."

Starbucks is on track to bring 1,600 new locations by fiscal year 2015.

This video includes images from Getty Images, and images and video from Starbucks Coffee Company.