Starbucks Expands in Cambodia to Tap One of Fastest Economiesby
Coffee chain opening a third outlet in Southeast Asian nation
Company has faced slowing same-store sales growth in the U.S.
Starbucks Corp. is expanding in Cambodia, one of the world’s fastest economies, as the company taps Asia for growth amid a mixed outlook in the Americas.
The Seattle-based coffee chain will open a two-floor, 650 square-meter (7,000 square-feet) store in the capital, Phnom Penh, on Friday to take advantage of a 10 percent annual increase in coffee consumption in the Southeast Asian nation, according to Asia-Pacific President Mark Ring.
"In the long term, we’re positive about Asia," Ring said in an interview on Thursday. "We’ll continue to look for opportunities over time."
The share of Asian revenue at the world’s largest coffee-shop chain has more than doubled in the past two years to 15 percent, putting overseas potential in focus as the U.S. market matures. The company entered Cambodia in December and with the new store will have three outlets in an economy the International Monetary Fund estimates will expand almost 7 percent this year.
Ring said Starbucks is aiming to appeal to a broad base in Cambodia, from tourists to young professionals, and will customize aspects such as the food service to suit local tastes.
The Cambodian footprint remains a fraction of Starbucks’ more than 6,200 stores in China and the Asia-Pacific region. Cambodia has a population of about 16 million people and gross domestic product per capita of $1,235, compared with $8,240 in China, according to IMF data. The Southeast Asian nation’s estimated GDP growth is among the top 10 in the world, the figures also show.
Starbucks’ stock has declined 11 percent so far in 2016, compared with an increase of almost 6 percent in the S&P 500 index. The shares are up 38 percent in the past three years, exceeding the 28 percent climb in the S&P 500.
Revenue in the quarter ended June 26 missed analysts’ estimates after same-store sales climbed 4 percent in the Americas, decelerating from a 7 percent increase in the prior quarter.