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Starbucks (US) Roastery in Shanghai Hits New High in Glossy Retail Theater

05 Dec 2017 - Three years after Starbucks debuted the Roastery on Capitol Hill as a playground for coffee aficionados, the company Wednesday is taking the wraps off a Shanghai version twice as large to introduce its most exclusive and expensive beans to its fastest-growing market.

Photos of the new Starbucks Reserve Roastery show a glitzy wonderland of marketing theater, its center stage dominated by a massive, two-story copper cask emblazoned with Chinese chops.

Starbucks said the ceiling of the 30,000-square-foot retail showpiece is covered by 10,000 hexagonal wooden tiles, all handmade. Not everything is low-tech, however. The company said that working with Alibaba Group, China’s big online retailer, it has developed an augmented-reality app that lets visitors learn more about the process of roasting and preparing coffee, and rewards them for exploring the Roastery.

Starbucks Chairman Howard Schultz said in an interview last month that the typical customer at the Seattle Roastery spends about four times as much as at a conventional Starbucks location. “One of the biggest surprises at the Roastery,” he added, “was that the evening is as big as the morning” — a goal the company has long pursued.

The company envisions the Roasteries — others are already in the works for Chicago, New York, Tokyo and Milan — as the top of a pyramid that markets its more specialized single-origin beans. More than 1,000 Starbucks Reserve coffee shops are also on the drawing board, as are hundreds of Princi cafes.

Spending on those high-end operations, collectively called Siren Retail, has proved “higher than we expected at the outset of 2017,” and will increase again next year, chief financial officer Scott Maw said on an early November earnings call.

Schultz has insisted the projects are not mere loss leaders, and will help the company reignite the overall growth rates that made it such a hot stock until a couple years ago.

China, of course, has become a key driver of growth for Starbucks. Shanghai alone has 600 stores, and nationwide Starbucks has more than 3,000 stores in 136 Chinese cities.


The Seattle Times

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