Former Starbucks executive to be Best Buy digital chief

NEW YORK – Fri Mar 9, 2012: Best Buy Co. named former Starbucks Chief Information Officer Stephen Gillett as the head of its digital and global business services, effective March 14.

The news comes as the world’s largest consumer electronics chain looks to find better ways to woo mobile and online shoppers, and tries to fend off rivals like Amazon.com .

In this newly created position, Gillett, 36, will oversee Best Buy’s ecommerce businesses, information technologies and global shared services.

Gillett will also be in charge of Best Buy’s digital strategy and marketing efforts, and finding new ways to “make technology a bigger part of the customer experience while enhancing operations and processes,” the company said on Friday.

Gillett will report directly to Best Buy Chief Executive Brian Dunn.

In an interview ahead of the official announcement, Dunn said he saw Gillett accelerating Best Buy’s transformation from best-in-class consumer electronics physical retailer to a multi-channel retailer.

Dunn expects Best Buy’s online business to more than double in the next five years, and said the company was keen to build on the online sales growth seen during the past two quarters and in December.

“We want to build on that momentum and Stephen’s track record makes it clear that he can help us engage customers online in ever more compelling ways,” said Dunn.

Under Gillett’s leadership, Starbucks decided to provide free Wi-Fi at all its U.S. outlets to boost customer traffic. He was also instrumental in helping Starbucks launch an in-store digital network with Yahoo , allowing customers to access local news, restaurant reviews and business news sites.

Starbucks tries local touch to lift growth in Europe

SEATTLE –  Wed Mar 7: Starbucks Corp., the world’s biggest coffee chain, is hoping to boost growth in Europe, the Middle East and Africa by opening so-called concept stores that tailor products and cafe interiors to local tastes, a senior manager told Reuters.

Starbucks will open between five and 10 such stores in the region this year, Rich Nelsen, senior vice president for Starbucks’ Europe, the Middle East and Africa business, said in an interview.

Those cafes will test new products, such as fresh-baked pastries, as well as exclusive coffees from small-scale farms, “If these new products and the other concepts we test here work, we will expand these to other countries,” he said.

On Friday, Starbucks will open its first European concept store in Amsterdam, followed by one in Kuwait later this year.

Concept stores test new Starbucks products and sales ideas while their design and interior are inspired by the particular city and country where they are located.

The store in Amsterdam will be its biggest in Europe at 430 square meters. Apart from its larger size and assortment with 16 new food products that are only sold here, the new concept store stands out because of its design.

Located in a former bank building, it will have locally sourced secondhand furniture and feature typical Dutch touches, such as stools resembling bike saddles and traditional Dutch blue and white tiles.

Starbucks raises prices averaging 1 percent in Northeast and Sunbelt

SEATTLE ― Starbucks Corp. raised prices by an average of about 1 percent in the Northeast and Sunbelt regions on Tuesday, a move affecting cities such as New York, Boston, Washington, Atlanta, Dallas and Albuquerque.

Shares of Starbucks, which boosted prices in some other U.S. markets in November, climbed 2.2 percent to a new high of $47.04 in early morning Nasdaq trading.

Starbucks expects high costs for items such as coffee, milk and fuel to cut into profits this year and — along with restaurant operators ranging from Chipotle Mexican Grill to McDonald’s Corp. — is raising prices to help offset some of that cost pressure.In New York City, prices for 12-ounce “tall” brewed coffees and latte drinks will go up 10 cents. Prices on about half a dozen other beverages also will increase, Starbucks spokesman Jim Olson told Reuters.

The world’s biggest coffee chain raised prices on some drinks in California and South Florida in November. Those regions are not affected by the Tuesday pricing action.

Olson said the price for a 16-ounce “grande” brewed coffee, Starbucks’ most popular beverage, remains the same across the United States and has not changed since January 2011. The price for grande lattes is unchanged in most markets, he added.

The Seattle-based chain has not made across-the-board price increases since 2007, choosing instead to adjust prices on a market-by-market basis.

Starbucks said its pricing decisions are based on multiple factors, not just the price of coffee, which has eased lately.

“These adjustments are the result of balancing the cost of doing business with competitive dynamics in these markets,” Olson said.

Starbucks’ cost of doing business includes expenses related to distribution, store operations and commodities, including fuel and ingredients for food and beverages, he said.

The company is also busy remodeling about 1,700 cafes.

Starbucks caters to a somewhat higher-income customer, and recent price increases prompted no apparent pushback.

In the fiscal fourth quarter, global sales at cafes open at least 13 months jumped 9 percent, better than the 6.5 percent gain analysts, on average, expected according to Thomson Reuters data.

Customers visited Starbucks cafes more often during the quarter and spent more money when they did. Same-restaurant sales at U.S. cafes, which account for about four-fifths of its revenue, rose 10 percent.

The company previously said it expects costs for commodities such as coffee and milk to reduce fiscal 2012 earnings by about 21 cents per share. Despite that, it has forecast a profit of $1.75 to $1.82 per share this year, which would represent profit growth of as much as 20 percent over fiscal 2011.

Starbucks launching new chain, buys juice company Evolution Fresh

SEATTLE ― Starbucks Corp. said it plans to open a health and wellness-focused chain next year after its acquisition of Evolution Fresh, a California-based premium juice maker, for $30 million.

Both moves were announced on Thursday.

The announcements come as the world’s biggest coffee chain seeks to increase sales by expanding into the $50 billion U.S. health and wellness category that is driving robust growth for retailers including Whole Foods Market Inc.

The Seattle-based company has been expanding the number of products it sells through grocery stores and other retail outlets and recently removed the word “coffee” from its logo to signal its move into broader categories.

“Bringing Evolution Fresh into the Starbucks family marks an important step forward in this pursuit,” Starbucks Chief Executive Howard Schultz said in a statement.

The company’s new retail concept, planned to launch in early-to-mid-2012, will be separate from Starbucks cafes and does not yet have a name.

The new chain will “redefine the super-premium juice category and experience” and offer a “wholesome portfolio” of food and beverages, Starbucks said.

Evolution Fresh was started by Jimmy Rosenberg, the founder of Naked Juice. The company uses a heat-free, high-pressure pasteurization process that it says retains more of the nutrients in its products compared with using conventional heat pasteurization.

Evolution Fresh’s products are currently sold in Whole Foods and PCC Natural Markets stores on the U.S. West Coast. Starbucks plans to expand distribution into additional retail channels and sell the products in its own retail stores.

Over time, Starbucks said it plans to invest in Evolution Fresh facility upgrades as well as its distribution business.

Starbucks expects Evolution Fresh to operate at a modest loss in fiscal 2012 before breaking even in fiscal 2013.

The company, which returned to profit growth in 2010 after a painful two-year restructuring, said its forecasts for fiscal 2012 are unchanged as a result of the acquisition.

Shares of Starbucks, which are up about 40 percent over the last 12 months, were up 1.2 percent at $43.48 on Thursday afternoon on the Nasdaq.

Shares of potential rival juice chain Jamba Inc. were up 3 percent at $1.71 after the announcement.

Starbucks helps start fund to stimulate U.S. job creation

SEATTLE ― Starbucks Corp. CEO Howard Schultz, decrying a lack of leadership in Washington, said his coffee store chain is helping launch a nationwide fund designed to stimulate U.S. job creation.

Starbucks on Monday introduced the “Create Jobs for USA” fund in partnership with Opportunity Finance Network, a group of private financial institutions that provide affordable loans to low-income people.

Schultz called small business an engine for job growth that has stalled and said small entrepreneurs must have access to credit so they can hire again.

“Businesses and business leaders need to do more, we can’t wait for Washington,” Schultz told Reuters in an interview, adding that Americans deserve better leadership.

The founder and chief executive of Starbucks created a political stir in August when he called on business leaders to withhold campaign donations to the president and members of Congress until a “fair, bipartisan” deal on the country’s debt, revenue and spending was reached.

Schultz said he has been frustrated by political dysfunction in Washington and called on people in positions of power to “put their feet in the shoes of people who are being left behind.”

Labor figures due on Oct. 7 are likely to show the unemployment rate stuck at 9.1 percent in September despite near-zero interest rates. Some 30 percent of the jobless have been out of work for at least a year.

While he has inserted himself into the national political debate, Schultz said he has no political ambitions.

“I have no interest in politics or political office. I’m just doing this as a private citizen trying to make a difference,” he said.

Starbucks said every $5 donation to “Create Jobs for USA” will generate $35 in financing for local businesses. The fund will be seeded with a $5 million donation from the Starbucks Foundation.

Moody’s Analytics Chief Economist Mark Zandi said the fund will be helpful to small businesses having difficulty securing loans in a tough economic climate.

As of Nov. 1, the fund will accept donations online and at 6,800 U.S. Starbucks cafes. Donors who give $5 or more will get a wristband inscribed with the word “Indivisible.”

Starbucks will cover Opportunity Finance Network’s administrative costs and pay for the wristbands.

Starbucks has about 107,000 U.S. employees, according to its most recent annual report.

Starbucks CEO saw no summer weakness; having ‘best year’

LOS ANGELES ― Starbucks Corp’s. business is “still very strong” despite months of economic turmoil that has weakened sales at other major restaurant chains, Chief Executive Howard Schultz told Reuters Thursday.

“Starbucks is having its best year and our business remains strong,” he said in a telephone interview.

The comments from the founder and CEO of the world’s biggest coffee chain came a day after Darden Restaurants Inc. said diners at its restaurants, which include Olive Garden, Red Lobster and Longhorn Steakhouse, ordered fewer appetizers, drinks and desserts during its fiscal first quarter ended Aug. 28.

Darden also said it expected its diners’ more frugal behavior to continue for the balance of the company’s fiscal year, but at a slightly more moderate level.

When asked if Starbucks has seen its customers respond in similar ways, Schultz said: “We have not.”

Starbucks was hit hard by the U.S. housing crisis that dragged the economy into recession. It shuttered nearly 1,000 stores around the world and slashed costs in a painful, but successful restructuring.

Its shares, which fell below $8 in November 2008, closed at $38.17 on the New York Stock Exchange.