From Starbucks' founding in Seattle as a local coffee bean roaster and retailer, the company has expanded rapidly. In the 1990s, Starbucks was opening a new store every workday, a pace that continued into the 2000s. The first store outside the United States or Canada opened in the mid-'90s, and overseas stores now constitute almost one third of Starbucks' stores. The company plans to open a net of 900 new stores outside of the United States in 2009, but has announced 900 store closures in the United States since 2008.
Starbucks has been a frequent target of protests on issues such as fair-trade policies, labor relations, environmental impact, perceived anti-competitive practices,* and rumors of support for the Israeli military.
The original Starbucks was opened in Pike Place Market in Seattle, Washington, in 1971 by three partners: English teacher Jerry Baldwin, history teacher Zev Siegel, and writer Gordon Bowker. The three were inspired by Alfred Peet to sell high-quality coffee beans and equipment. From 1971–1976, that first Starbucks was at 2000 Western Avenue; it then was relocated to 1912 Pike Place, where it remains to this day. During their first year of operation, they purchased green coffee beans from Peet's, then began buying directly from growers.
Entrepreneur Howard Schultz joined the company in 1982 as Director of Marketing, and after a trip to Milan, Italy advised that the company should sell coffee and espresso drinks as well as beans. The owners rejected this idea, believing that getting into the beverage business would distract the company from its primary focus. To them, coffee was something to be prepared in the home. Certain that there was money to be made selling pre-made drinks, Schultz started the Il Giornale coffee bar chain in 1985..
Sale and expansion
In 1987, they sold the Starbucks chain to Schultz's Il Giornale, which rebranded the Il Giornale outlets as Starbucks and quickly began to expand. Starbucks opened its first locations outside Seattle at Waterfront Station in Vancouver, British Columbia, and Chicago, Illinois, that same year. At the time of its initial public offering on the stock market in 1992, Starbucks had grown to 165 outlets.
The first Starbucks location outside North America opened in Tokyo, Japan, in 1996. Starbucks entered the U.K. market in 1998 with the acquisition of the then 60-outlet, UK-based Seattle Coffee Company, re-branding all the stores as Starbucks. By November 2005, London had more outlets than Manhattan, a sign of Starbucks becoming an international brand.
In April 2003, Starbucks completed the purchase of Seattle's Best Coffee and Torrefazione Italia from AFC Enterprises, bringing the total number of Starbucks-operated locations worldwide to more than 6,400. On September 14, 2006, rival Diedrich Coffee announced that it would sell most of its company-owned retail stores to Starbucks. This sale includes the company-owned locations of the Oregon-based Coffee People chain. Starbucks converted the Diedrich Coffee and Coffee People locations to Starbucks, although the Portland airport Coffee People locations were excluded from the sale.
Many bookstores have Starbucks outlets within them, including Barnes & Noble in the United States, Borders in the United Kingdom, and Chapters in Canada.
The Starbucks location in the former imperial palace in Beijing closed in July 2007. The coffee shop had been a source of ongoing controversy since its opening in 2000 with protesters objecting that the presence of the American chain in this location "was trampling on Chinese culture." Also in 2007, Starbucks cancelled plans to expand into India,but opened its first store in Russia, ten years after first registering a trademark there. In 2008, Starbucks continued its expansion, settling in Argentina, Bulgaria, the Czech Republic and Portugal. In April 2009, Starbucks entered Poland.New stores will be opened in Algeria.
In 1999, Starbucks experimented with eateries in the San Francisco Bay area through a restaurant chain called Circadia.These restaurants were soon "outed" as Starbucks establishments and converted to Starbucks cafes.
In January 2008, Chairman Howard Schultz resumed his roles as President and CEO after an eight year hiatus, replacing Jim Donald, who took the posts in 2005 but was asked to step down after sales slowed in 2007. Schultz aims to restore what he calls the "distinctive Starbucks experience" in the face of rapid expansion. Analysts believe that Schultz must determine how to contend with higher materials prices and enhanced competition from lower-price fast food chains, including McDonald's and Dunkin' Donuts. Starbucks announced it will discontinue its warm breakfast sandwich products, originally intended to launch nationwide in 2008, in order to refocus the brand on coffee, but the sandwiches were reformulated to deal with complaints and the product line stayed. On February 23, 2008, Starbucks closed its stores from 5:30-9:00 p.m. local time to train its baristas.
In March 2008, Schultz made several announcements to Starbucks shareholders. Schultz introduced Starbucks' "state of the art espresso system", the Thermoplan AG manufactured Mastrena, which replaced their previous superauto, the Thermoplan Verismo 801 (known internationally as the Thermoplan Black & White). Starbucks also announced that the company hopes to enter the energy drink market. Pre-ground beans will no longer be used, so that the grinding of whole bean coffee will "bring aroma, romance and theater" to American stores. The company also announced the acquisition of The Coffee Equipment Company, the manufacturer of the Clover Brewing System. They are currently test marketing this "fresh-pressed" coffee system at six Starbucks locations; three in Seattle, and three in Boston.
Starbucks stopped using milk originating from rBGH-treated cows in 2007.
In early 2008, Starbucks started a community website, My Starbucks Idea, designed to collect suggestions and feedback from customers. Other users comment and vote on suggestions. Journalist Jack Schofield noted that "My Starbucks seems to be all sweetness and light at the moment, which I don't think is possible without quite a lot of censorship". The website is powered by the Salesforce software.
In May 2008, a loyalty program was introduced for registered users of the Starbucks Card (previously simply a gift card) offering perks such as free Wi-Fi Internet access and free refills.. Additionally, Starbucks Gold, a $25 yearly membership, entitles members to 10% off all purchases (besides iTunes, magazines, and payment for the membership/gift card) in Starbucks (not Barnes & Noble) stores, and along with 3 10% off guest passes, allows for a member to bring people in for friends and family day, allows for free treats throughout the year, 2 hours of AT&T Wi-Fi, and members-only discounts.
In June 2009, the company announced that it will be overhauling its menu and selling salads and baked goods without high-fructose corn syrup or artificial ingredients.The move is expected to attract health- and cost-conscious consumers and will not affect prices.
2009 New York City bombing
At approximately 3:30 a.m. on May 25, 2009, a Starbucks store on the Upper East Side in the Manhattan borough of New York City, New York, was bombed. A small improvised explosive device was used and damage was limited to exterior windows and a sidewalk bench; there were no injuries. Residents of apartments above the bombing site were briefly evacuated. Police believed at first that the bombing may be related to a serial bomber operating in Manhattan,because it was similar in nature to earlier bombings in Manhattan at the British and Mexican consulates, as well as a U.S. military-recruiting center in Times Square. However, a 17-year-old boy was arrested that July after boasting that he bombed the store to emulate the movie Fight Club.