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Starbucks adds more shops, food to menu

Over one-third of planned new shops will be in China

By JOSEPH PISANI, Associated Press
Published: December 7, 2016, 4:24pm

NEW YORK — Starbucks, looking to the future as its CEO moves to other projects, plans to open 12,000 new locations within five years to boost its number of coffee shops worldwide by almost 50 percent.

The Seattle-based chain is also adding more food to its menu next year, including organic soups, gluten-free breakfast sandwiches and a wheat-free cooked egg product. And sometime in 2017, customers will be able to talk to the Starbucks app to order a latte or cookie instead of tapping their smartphones.

Starbucks outlined its five-year growth plans to investors on Wednesday, about a week after it announced that Howard Schultz, who has built Starbucks into a global brand with 25,000 locations since first joining the company more than 30 years ago, would step down as CEO in April. Starbucks has been facing increasing competition from Dunkin’ Donuts and McDonald’s as those companies add more specialty coffee drinks to their menus.

About 5,000 of the 12,000 stores Starbucks plans to open by 2021 will be in China. The company said again that it expects China to eventually overtake the U.S. as its largest market, but didn’t say when it expects that to happen. Today there are about 2,500 stores in China and more than 13,000 in the U.S.

Starbucks also wants to get more customers to buy lunch at its shops by offering organic soups and adding more sandwiches and wraps. Iced beverages, such as cold brew coffee and iced lattes, are expected to become more popular in the next five years and account for about half of beverage sales, the company said.

An app update next year will use artificial intelligence technology to let customers order by voice and have the app respond immediately with a message. In China, the company said it is teaming up with popular messaging app WeChat to let users buy digital Starbucks gift cards for their friends.

Investors also got to hear from Chief Operating Officer Kevin Johnson, who will replace Schultz as CEO in April. Schultz stressed again that he wasn’t leaving the company and will oversee the growth of its Starbucks Reserve Roasteries stores.

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