Starbucks has announced that it is to close all 23 of its La Boulange retail (bakery cafés) locations, as well as the two manufacturing facilities that serve those locations, by the end of September 2015.
The company said that based on its ongoing evaluations, it had determined La Boulange stores were not sustainable for the company’s long-term growth.
At the same time, the company has announced that its Mobile Order & Pay scheme, which began as a pilot in Portland in December 2014 and launched in the Pacific Northwest in March 2015, is expanding to c3,400 stores in 21 more states in the southern and central US.
On the La Boulange decision, the group said: “Food is a key element of Starbucks growth strategy to create new occasions to visit stores, and the company has seen tremendous response to these efforts since the acquisition of La Boulange. In the most recent quarter, (Q2 FY15) food delivered growth of 16% year-over-year and contributed two points to the comp growth with every daypart, platform and region contributing to the increase.
Sales of Starbucks new breakfast sandwiches have contributed a noteworthy 35 percent year-over-year growth in the breakfast platform. And, the company’s lunch platform delivered double-digit year-over-year gains. Starbucks has successfully delivered an up-leveled food experience with the roll-out of La Boulange products in its US and Canada stores, which have been well received by customers.
“As Starbucks stays steadfast in its commitment to achieve long-term growth targets enterprise-wide, it is with careful consideration the company shares the difficult decision to close all 23 La Boulange retail (bakery cafés) locations, as well as the two manufacturing facilities that serve those locations, by the end of September 2015.
“As a standard course of business, Starbucks continually evaluates all components of its business to confirm they are aligned with key priorities and strategies for growth, which includes the continued analysis of the store portfolio. The La Boulange brand will continue to play a significant role in the future of Starbucks food in stores, and the company looks forward to serving delicious La Boulange food at its Starbucks retail locations in San Francisco and across the US and Canada. The Evolution Fresh retail location in San Francisco will also close.
“Starbucks goals to grow its food business and deliver an incremental $2bn in the next five years in the U.S. are unchanged. Starbucks will continue to deepen its commitment to customers’ food experience in stores, ensuring it surpasses their expectations, just as the company has done with coffee and beverages.”
