Starbucks Outlines International Growth Strategy for Fiscal 2007

At Starbucks (NASDAQ:SBUX) analyst conference today, Martin Coles, president, Starbucks Coffee International, highlighted the Company’s new market plans for fiscal 2007. If the Company meets its projections and establishes locations in Brazil, Russia, India and Egypt by the end of calendar 2007, Starbucks will have a presence in 40 countries outside the United States. "Our International growth strategy balances accelerated development in line with the long-term retail potential of existing countries, while entering several promising new markets,” said Coles. "The Company’s entrance into the three large markets of Brazil, Russia and India as well as establishing our first African location will propel Starbucks International expansion towards meeting its long-term store potential of 20,000 locations, which is up from 15,000 previously targeted.” Through a joint-venture partnership with M.H. Alshaya, Starbucks is planning to enter the African continent with its first location in Cairo, Egypt by the end of calendar 2006. With consumerism on the rise and a growing middle class, Egypt presents an exciting retail opportunity for Starbucks. Africa is the birthplace of coffee and produces arguably the most exotic taste profile of any coffees in the world. Starbucks purchases approximately five percent of its high-quality arabica coffee from African countries of origin such as Ethiopia and Kenya. The Company also plans to open its first store at Shopping Morumbi in Sao Paulo, Brazil by the end of calendar 2006. Brazil is the largest market in Latin America and is a country rich in coffee and espresso heritage. Starbucks – through its joint-venture company, Starbucks Brasil Comercio de Cafes – will complement the established coffee culture in the world’s largest coffee producing country with its version of the coffeehouse experience. In addition to Egypt and Brazil, two major countries that afford Starbucks great potential for growth are Russia and India. Starbucks has been planning to enter Russia for some time and together with its joint-venture partner M.H. Alshaya, targets opening its first store in Moscow, Russia in the fourth quarter of fiscal 2007. Russia has one of the largest and fastest developing economies in Europe. This growth, combined with Russia’s market size, growing coffee consumption, and affinity for western brands make it a key opportunity for Starbucks. In India, Starbucks is negotiating the terms of a joint venture and will make an announcement once a definitive agreement has been signed. With more than 1.2 billion people, a rapidly growing economy and significant increases in consumer spending, India represents one of the most exciting growth markets in the world for the Company. India’s economy is expected to continue with strong growth over the long term, and Starbucks initial focus will be on major cities such as Delhi and Mumbai. Through the dedication of our passionate partners (employees), Starbucks Coffee Company has transformed the way people in 37 countries enjoy their coffee, one cup at a time. Starbucks is the premier purveyor of the finest coffee in the world, with more than 12,000 retail locations in North America, Latin America, Europe, the Middle East and the Pacific Rim. The Company is committed to offering its customers the highest quality coffee and human connection through the Starbucks Experience, while striving to improve the social, environmental and economic well being of its partners, coffee farmers, countries of coffee origin, and the communities which it serves. Through Ethos Water, Starbucks demonstrates its long history of integrating a social conscience into all aspects of its business. The Company surprises and delights its customers by producing and selling bottled Starbucks Frappuccino® coffee drinks, Starbucks DoubleShot® espresso drinks and Starbucks® superpremium ice creams through its joint-venture partnerships, and Starbucks™ Coffee and Cream Liqueurs through a marketing and distribution agreement, in other convenient locations outside its retail operations. The Company’s brand portfolio includes superpremium Tazo® teas, Starbucks Hear Music™ compact discs, Seattle’s Best Coffee and Torrefazione Italia. These brands’ unique and innovative personalities allow Starbucks to appeal to a broad consumer base. This release includes forward-looking statements regarding anticipated store openings and anticipated new international markets. These forward-looking statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties. Actual future results and trends may differ materially depending on a variety of factors including but not limited to, successful execution of internal performance and expansion plans and other risks detailed in the Company's filings with the Securities and Exchange Commission, including the "Risk Factors" section of Starbucks Annual Report on Form 10-K for the fiscal year ended Oct. 2, 2005. The Company assumes no obligation to update any of these forward-looking statements.