Starbucks Corp. is set to significantly expand its presence in the Middle East, announcing plans to open approximately 500 new stores over the next five years. This move comes as the global coffee chain aims to recover from a challenging year marked by consumer boycotts and declining sales in the region.
In an interview with Bloomberg Television, CEO Brian Niccol revealed that this expansion will also create around 5,000 jobs.
Currently, Starbucks operates more than 1,300 locations in the Middle East. The company faced backlash last year as customers accused it of not adequately addressing the conflict in Gaza, which led to boycotts that negatively impacted sales and customer traffic both in the Middle East and the United States.
Niccol addressed these accusations, stating that the boycotts were based on misinformation. “We’ve never supported any militaries,” he asserted during his first visit to the region since taking over as CEO last year.
Since joining Starbucks in September, Niccol has focused on revitalizing growth amid various challenges, including long wait times and rising prices that have deterred customers. His initial strategy concentrated on North America, where he plans to streamline operations by reducing management layers and clarifying responsibilities. These changes may lead to job cuts expected to be announced by early March.
Now, Niccol is shifting his attention to international markets. In addition to the Middle East expansion, he mentioned plans for further growth in China, despite facing difficulties due to economic instability and stiff competition from lower-priced brands. Reports indicate that Starbucks is exploring options for its Chinese operations, which could involve selling a stake in the business.
Starbucks shares have seen a 24% increase this year as of Wednesday’s close. The stock’s rise follows a recent announcement indicating that the company’s sales decline has slowed, suggesting that Niccol’s strategies may be starting to yield positive results.
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