Seattle’s Best to Open Stores in Wal-Mart Parking Lots

Seattle’s Best Coffee, the chain owned by Starbucks Corp. (SBUX), tomorrow will open 10 new locations mostly in Wal-Mart Stores Inc. (WMT) parking lots, in what will be the biggest one-day opening event ever for the coffee seller.

Eight of the 10 stores in the Dallas area will be in Wal-Mart lots, Frank Sica, vice president and general manager of Seattle’s Best, said in an interview. There’s no indoor seating at the 523 square-feet (49 square meters) shops and customers order from their cars at the drive-thru or at a walk-up window, he said.

“Our customer is definitely on the go -- they’re value conscious and they’re in need of a better cup of coffee,” Sica said. “We were very strategic in terms of where we placed our locations.”

Starbucks, which has owned Seattle’s Best since 2003, has been trying to boost U.S. sales by expanding beyond its traditional coffee cafes. The Seattle-based company is also opening new Teavana locations after acquiring the tea seller last year for about $626 million. Starbucks has said it would expand Seattle’s Best and revive its retail presence with more locations.

Seattle’s Best has “forged a very strong relationship with Wal-Mart,” Sica said. He declined to discuss future expansion plans and specifics of the contract with the world’s largest retailer, which is based in Bentonville, Arkansas.

The first of the smaller-sized shops opened in November in Seattle after the brewer closed about 475 Seattle’s Best stores that were inside Borders Group Inc. locations following the bookseller’s bankruptcy filing in 2011.

Dunkin’ Donuts

Four more Seattle’s Best drive-thru stores are slated to open in the Dallas-Fort Worth area this year. The chain has about 75 locations, while Starbucks, the world’s largest coffee-shop operator, has more than 11,100 shops in the U.S.

Starbucks rose less than 1 percent to $64.13 on May 17. The shares have gained 20 percent this year through last week, while the Standard & Poor’s 500 Index has advanced 17 percent.

Dunkin’ Donuts has also recently announced that franchisees are opening more units in Texas cities including Austin and Dallas. Dunkin’ Donuts, owned by Canton, Massachusetts-based Dunkin’ Brands Group Inc. (DNKN), has more than 7,300 domestic locations.

Dunkin’ Donuts, as well as McDonald’s Corp. (MCD), is considered a Seattle’s Best competitor, Sica said.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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