Starbucks to Renovate Fewer Stores in 2011


Starbucks (SBUX) plans to reduce the number of stores it renovates in 2011 as it focuses on flagship outlets, Bloomberg News reported.

The company will leave its renovation budget unchanged at $250 million, but renovate only about half the 1,900 stores due to be upgraded next year, development chief Arthur Rubinfeld told Bloomberg News.

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The strategy will focus on stores in neighborhoods like New York's Soho district in a bid to lift the whole brand, Rubinfeld said.

Leaving stores unchanged could prove risky, as Starbucks is facing stiff competition from McDonald's Corp. (MCD), which is pushing coffee and plans to spend $1.2 billion on renovations this year.

"I have concern over Starbucks setting expectations that don't get fulfilled by a visit to a typical store," Julius Dorsey, the president of the Cleveland-based management consultant Dorsey & Co., told Bloomberg News.