Starbucks to brew in Italy

By Money Times

Oct 19, 2015 08:21 AM EDT

A negotiation between the U.S. company and Italian businessman Antonio Percassi to bringing Starbucks to Italy is already in process.  The agreement is set to be finalized this coming Christmas according to the newspaper Corriere della Serra.

Asked about the report, Starbucks spokesman Corey duBrowa said: "Rumors and speculation only. We have nothing to say about it."

The Percassi group owns cosmetics chain Kiko and has more than 700 shops across Europe and the United States.  It is based in Bergamo, near Milan and also has a franchising deal in Italy with U.S. lingerie chain Victoria's Secret, as reported by Reuters.

The Starbucks chairman and CEO Howard Schultz had informed previously that he was inspired to open his first coffee shop after visiting Milan and admiring the city's thriving café culture.  His group had opened many Starbucks coffee shop but never ventured in Italy, come to think that the country has the seventh highest per capita coffee consumption in Europe, as per European Coffee Federation.

Speculations from analysts arise thinking that Italians might not consume or endorse coffee from Starbucks since they are used to short, sharp shots of caffeine which is far  cheaper than Starbucks' brews and are usually drunk in one or two gulps at a bar counter.  In case Starbucks successfully ventures into Italy, it would be the second major U.S. brand to try to take on the locals at their own game in swift succession.

The expansion might not be easy for the coffee retailer since the Italian market is already dominated by local brands with huge market shares making the market highly competitive.  Italians are very meticulous with their coffee and would love to have dark roasted coffee and grown brands such as Lavazza and Segafredo, as reported by the Business Finance News.

Unfortunately, not all international ventures were a success.  Just like last year when Starbucks sustained a loss in Australia.  The coffee restaurant opened the business in 2000, but since then, struggled against the country's domestic brands including McDonald's McCafé and Gloria Jeans among others.

The major problem is experienced in the Land Down Under didn't just include high competition, but outlet location as well at places with few pedestrian movement. Other reasons included high menu prices and deficiency of marketing campaign.  The company lost $100 million, therefore, closing 61 stores there.

Starbucks announced last week that they will start office delivery services in the Empire State Building.  Starbucks baristas at the 33rd street-side will be the one to deliver with a charge of $2.

© 2024 VCPOST, All rights reserved. Do not reproduce without permission.

Join the Conversation

Real Time Analytics