Starbucks 2000 Annual Report Download - page 1

Letter to Shareholders starbucks coffee company P. 17
To our Shareholders,
We entered the new Millennium with a great sense of accomplishment and excitement, knowing that
we were poised to share the Starbucks Experience with even more people around the world. Today, the
anticipation we experienced as we began fiscal year 2000 has been more than fulfilled, thanks to the
passion and dedication of our partners (employees), our unwavering commitment to the highest
quality coffee, and the connection that we are fortunate to enjoy with our customers. We believe that
the possibilities for our future achievements are virtually limitless, and we are even more inspired to
climb to greater heights. These are still the early days of building our company and the Starbucks brand.
Starbucks experienced tremendous success and growth in fiscal year 2000. We had record
revenues of $2.2 billion for the year. Our stellar performance included three consecutive quarters of
double-digit comparable store sales increases - an amazing achievement for any retail company of our
size and maturity, culminating in a 9 percent comparable stores sales growth for the full year, the
highest it has been since 1995.
We far exceeded our projected target of 600 new store openings for the year, with 1,035 new company-
owned and licensed locations worldwide, including 778 stores in North America alone. We surpassed
our goal to open 150 international stores, opening 257 international locations by the end of fiscal
year 2000. In the United Kingdom, we opened 63 new locations, well ahead of our target of 50
stores. We also entered a number of international markets including Lebanon, the United Arab
Emirates, Qatar, Hong Kong, Shanghai and Australia, bringing our total number of international
locations to 525 at the end of the fiscal year. During the year we acquired a majority interest in our
Thailand operations. We were also thrilled to announce our plans to enter Switzerland, our first
market in continental Europe. Our remarkable success in virtually every international market we
have entered to date has inspired us to set ambitious targets for the future. We plan to have 650
Starbucks locations throughout Europe by the end of fiscal year 2003, and we believe that customers
in the European market will embrace the Starbucks Experience.
Our outstanding growth is testimony to the strength of the Starbucks brand worldwide. When we
opened our first store in Tokyo, consultants told us that Japanese customers would never use to-go
cups or drink coffee while walking on the street. If you visit Japan today, you will see people proudly
holding Starbucks cups with the logo facing out. As the result of our customers’ warm acceptance,
Starbucks Coffee Japan became profitable in fiscal year 2000 - more than two years ahead of plan.
Additionally, we were extremely pleased that Nikkei Restaurant Magazine, one of Japan’s most respected
food service industry publications, recognized Starbucks as the most preferred restaurant chain in
Tokyo, just four years after our entry into the market. In addition, Interbrand Corporation, the
world’s leading brand consultancy, recently ranked Starbucks as one of the top 75 global brands.
These accomplishments confirm our belief that we have incredible opportunities ahead.
By the end of fiscal year 2000, Starbucks had more than 3,500 locations worldwide, serving more
than 12 million customers per week in 17 countries. We believe that in the past we dramatically
underestimated the size of the global market and the power of the Starbucks brand. We now believe
that we have the potential to have at least 20,000 locations worldwide, with as many as 10,000
locations in international markets.