Starbucks Says Its New Stores in Low-Income Areas Are Profitable

Starbucks Corp. said its move to put stores in low-income areas such as Ferguson, Missouri, hasn’t been a money-losing endeavor.

The three locations open so far as part of the project have been profitable, said Rodney Hines, director for community investments for Starbucks’ U.S. retail operations. And the company is unveiling a fourth cafe on Wednesday on the South Side of Chicago.

Starbucks location in the South Side of Chicago.

Photographer: Leslie Patton/Bloomberg

Starbucks kicked off the effort in March with a location in the Jamaica section of Queens in New York. It then opened a store in Ferguson, the scene of riots in 2014 after the fatal police shooting of a black teenager, and Phoenix. Though the idea is to create jobs in troubled neighborhoods, the new stores aren’t all that different than its other locations, Hines said.

“These stores are generating the business that happens in the rest of our portfolio of stores,” he said in an interview.

The new Chicago cafe, located in the Englewood neighborhood, created 26 jobs. Almost three-quarters of the local population age 20 to 24 is unemployed, the company said.

By 2018, Starbucks plans to bring the program to at least 15 communities. That includes expanding to underserved parts of Baltimore; Birmingham, Alabama; Long Beach, California; Miami; and Seattle.

There’s also the possibility to take the concept overseas, though it may take some tinkering, Hines said.

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