Date
24 July 2017
Standard quality and modern store design were some of the key draws of Starbucks as it competed with traditional coffee shops in France. Photo: Starbucks
Standard quality and modern store design were some of the key draws of Starbucks as it competed with traditional coffee shops in France. Photo: Starbucks

Can Starbucks brew success in Italy?

Forty-six years after its founding, US coffee chain Starbucks has finally decided to set up shop in Italy, the birthplace of the espresso.

The move assumes special significance as Starbucks’ chairman, Howard Schultz, has said in the past that he drew inspiration from Italy’s lively coffee bar scene, helping him create similar community gathering spaces in the US.

The Starbucks chain now operates over 22,000 stores in dozens of countries across the world. Perhaps out of deep respect for the Italian coffee heritage, Schultz has waited all these years before entering that market.

Italy is the home of espresso, after Angelo Moriondo invented a steam-driven “instantaneous” coffee beverage making device in Turin in 1884.

Espresso bars are everywhere in Italy and having a coffee is simply part of life for the people.

Scheduled to open in late 2018, the first Starbucks outlet in Italy will be housed in a giant 25,500-square-foot facility in Piazza Cordusio, which is close to Milan’s core financial district.

But the question now is, what will be the business prospects? Will Starbucks be able to succeed in a country regarded as the Mecca of coffee?

Can the coffee house compete with numerous local espresso bars in Italy, where customer care is crucial? This is the thought passing through the mind of observers and analysts. 

Espresso bars, places offer both coffee drinks and alcoholic beverages, have long become a staple of everyday life for Italians.

Regarding Starbucks’ prospects, the brand’s experience in France can perhaps give us some clues.

Starbucks made its foray into France in 2004, which was a bold move back then.

France, like Italy, also has its own unique coffee heritage and coffee culture.

That, however, did not prevent Starbucks from becoming very popular among young French people. The young generation appreciates the quick service of Starbucks, where customers can quickly grab a cup of coffee and take it to school or office.

Starbucks stores also became a hot venues for people to hang out.

Starbucks coffee may not taste the best, but the standardized production procedure ensures steady quality. French youth also like the modern look of Starbucks shops.

This has encouraged the coffee chain to open over 120 branches in France, now its fourth biggest market in Europe.

To further expand its presence in the country, Starbucks has signed a partnership with two high-end grocery stores Monoprix and Casino to open mini-stores. The Seattle-headquartered giant aims to have over 300 stores in France within three years.

Following its record in France, we can say that Starbucks, with luck and proper execution, stands a good chance of cracking the Italy market too.

This article appeared in the Hong Kong Economic Journal on March 8

Translation by Julie Zhu

[Chinese version 中文版]

– Contact us at [email protected]

RC

Hong Kong Economic Journal columnist

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