Starbucks lays out growth plans

Allison Linn

Wednesday, March 31, 2004 | 11:18 a.m.

SEATTLE -- Think there's already a Starbucks on every corner? Think again.

Starbucks is opening coffee shops at the rate of about 3 1/2 a day worldwide, and that figure could increase, chief executive Orin Smith told shareholders at the company's annual meeting Tuesday.

The long-term plan is to have about 25,000 stores worldwide -- more than triple the nearly 8,000 stores the coffee retailer has right now. And even that amount seems a little "light," according to Starbucks chairman Howard Schultz.

To accommodate those plans, the company, which already employs more than 80,000 people, is hiring 250 people a day, the executives told a packed house of thousands of shareholders.

"Both domestically and internationally, we probably underestimated the size of the global opportunity that we have," Schultz said in an interview after the meeting.

The Seattle-based company's aggressive expansion plans go far beyond just coffeehouses. Starbucks' future will include making money on everything from bottled coffee drinks -- which the company hopes to start selling internationally within a year -- to music, the executives said.

As is usual for Starbucks, the meeting was more show-and-tell than sales figures. Against a set built to look like the first Starbucks store at Pike Place Market in Seattle, Schultz started things off by conducting a band of percussionists -- with Smith joining in on a massive pair of drums.

During the nearly three-hour meeting, several of the company's executives sang and danced -- literally -- in skits played on a large-screen projector. In one, Schultz was inserted into a David Letterman piece on "Top 10 Things You Don't Want to Hear From a Guy at Starbucks" (No. 6: "One Decaf Venti Skim Latte -- $39").

The crowd, which had feasted on pastries, lattes and other treats, was generally adoring, with one shareholder even suggesting the crowd begin a cheer for the company.

But two shareholders berated the company for not offering dividends. Smith and Schultz both said Starbucks is considering such a plan, but that its current growth rate means that it may need any cash on hand.

The meeting also featured a live performance by Emmylou Harris -- whose favorite songs will be on an upcoming Starbucks CD -- as well as acrobats, videos from executives and a testimonial from a longtime employee, roaster Tom Walters.

Recounting the changes in his 22 years with the company, Walters said: "I just can't believe there are so many Starbucks stores."