Starbucks to Add Beer, Wine in Chicago

Windy City to join Seattle, Portland in early rollout of evening daypart concept

Published in CSP Daily News

CHICAGO -- Starbucks Coffee Co. plans to open as many as seven stores that sell beer and wine in the Chicago area by the end of 2012, reported the Chicago Tribune.

The Seattle-based coffee giant has been testing a more community-oriented store concept to boost traffic in the evening for more than two years. These stores offer savory, high-quality, small-plate options like cured meats, and beer and wine, in addition to the usual coffee and tea.

Starbucks has also been experimenting with live entertainment, including music, poetry readings or theater, depending on the neighborhood, said the report.

"We're really trying to expand the evening daypart," Starbucks spokesperson Alan Hilowitz told the newspaper. "Customers have told us they want to be able to come in and have coffee, or a glass of wine."

At the six stores currently open in the Seattle area and Portland, he added, same-store sales after 4:00 p.m. have increased by double-digit percentages.

Hilowitz declined to provide Starbucks' investment relating to the stores, adding that some will be in new locations, and others in existing locations that will be remodeled. Specific locations have yet to be finalized as the company is working with local officials to obtain the proper licenses and permits.

Darren Tristano, executive vice president of Technomic, told the Tribune that the move makes sense given the cafe environment, adding that Burger King is also experimenting with beer service at its Whopper Bar chain.

"Higher price points can be more profitable, but permitting could be more of an issue and a really important factor will be how guests who consume adult beverages interact with guests who don't," he said.

Morningstar analyst R.J. Hottovy said that the concept has tested well enough in Seattle to warrant expansion, and Chicago has often served as a proving ground for Starbucks. It was the second U.S. city after Seattle to host its cafes, said the report.

The concept gives Starbucks access to new customers, particularly "the kind of customer who isn't a coffee drinker," he told the paper.

Starbucks is committed to expanding its store base and remodeling stores, Hilowitz said. During the fiscal year ended in October, the chain remodeled 40 Chicago-area stores. By October 2012, Starbucks plans to open six to 10 new stores and remodel another 100 there.

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