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Starbucks (SBUX) to Open Largest Reserve Roastery in Chicago

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Starbucks Corporation (SBUX - Free Report) is all set to open its largest ever Reserve Roastery in Chicago. The company will open the store for coffee lovers on Friday.

The 35,000-square-feet store, situated on North Michigan Avenue and Erie Street on Chicago’s Magnificent Mile, will be the company’s sixth global Reserve Roastery. The other five Reserve Roastery are located in Seattle, Shanghai, Milan, New York and Tokyo.

This store has three major coffee bars — Starbucks Reserve Coffee Bar, Experiential Coffee Bar and Barrel-Aged Coffee Bar. These bars will provide seven brewing methods, which includes espresso, pour over, coffee press, siphon, Chemex, Clover and cold brewing.

Starbucks’ strategy to boost the overall brand through its premium Roastery/Reserve brands is a significant opportunity. The company had previously stated that it plans to invest in the premium Reserve brand that included the opening of 20-30 Roastery locations globally.

Starbucks CEO, Kevin Johnson said, “These Roasteries amplify the Starbucks brand, serve as innovation hubs, and create experiences for millions of customers around the world.”

Strategic Expansion to Drive Growth

Management focuses on increasing its global market share by opening stores in new and existing markets, remodeling existing stores, deploying technology, controlling costs as well as undertaking product innovation and brand building. In fiscal 2019, Starbucks added 1,900 net new stores. In 2018 and 2017, the company had added 2,300 and 2,250 net new locations, respectively.

For fiscal 2020, Starbucks plans to add 2,000 net new stores (600 net new stores in Americas and 1,400 net new stores internationally). New store productivity and Return on Investment (ROI) in the United States and China are high. By fiscal 2021, the company intends to open approximately 12,000 stores globally, taking the total store count to an estimated 37,000.

Courtesy of these efforts, the stock has outperformed the industry year to date. In the same time frame, the company’s shares have rallied 29.3% compared with the industry’s rise of 16.4%.

Zacks Rank & Key Picks

Starbucks currently has a Zacks Rank #3 (Hold). Better-ranked stocks worth considering in the same space include Brinker International, Inc (EAT - Free Report) , Chipotle Mexican Grill, Inc (CMG - Free Report) and Cracker Barrel Old Country Store, Inc (CBRL - Free Report) . All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Brinker International have increased 20.4% in the past three months.

Chipotle Mexican Grill has reported better-than-expected earnings in all of the trailing four quarters, the average being 16.1%.

Cracker Barrel Old Country Store has an impressive long-term earnings growth rate of 10%.

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