Starbucks Is Running out of Room to Grow... What's Next?
Starbucks (NASDAQ: SBUX) may have hit a saturation point when it comes to opening its basic cafe units in the United States.
A recent study from BMO Capital Markets pointed out that the chain's average store has 3.6 other Starbucks cafes within a one-mile radius. That means that adding new locations in most of its markets won't add sales. Instead, it will cannibalize customers from existing stores.
To keep growing, at least in its home market, the coffee chain won't succeed by adding thousands of new locations. Instead, Starbucks' U.S. growth will be fueled by getting more money out of its existing customers by offering higher-end, higher-priced experiences.
Source: Fool.com
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