COMMENT: Starbucks may turn to alcohol
The Starbucks Kobe outlet is currently the only Starbucks in the world offering alcohol. The kiosk offers the usual Starbucks fare along with beer and wine. Even though Starbucks has no specific plans to sell alcohol in any other stores in Japan, last month shareholders altered the Japanese charter, allowing the sale of alcohol at any outlet.
The amendment is one way to revive Starbucks' buzz. Since its opening in 1996, Starbucks has expanded rapidly in Japan. However, sales have slowed recently leading to tumbling profits as competitors such as Seattle-based Tully's Coffee invade the market.
The ability to serve alcohol is part of a string of innovations aimed at reviving sales. Examples include the DoubleShot, a cold creamy coffee drink mixed in a cocktail shaker, and Jelly Frappuccino, a drink with floating cubes of coffee-flavored jelly. Starbucks also plans to start serving hot foods such as pizza and pork-pastrami sandwiches by October.
The changes also embrace a broader shift in consumer behaviour. Consumers are increasingly going out during the week and are looking for a quality meal that is quick and convenient to eat. At the same time, they are seeking relaxation as they attempt to maximize their leisure time. This has contributed to the rise of the 'all-purpose, all-accessible, all-affordable' restaurant. New York based, Cosi Sandwich Bar has been particularly successful in embracing this all-purpose philosophy. Cosi is a combination of a coffee shop, deli, dine-in restaurant and bar which satisfies the changing needs of customers as the day progresses.
Japan serves as an ideal test market. Japanese consumers eagerly embrace new ideas, making it quicker to develop and test concepts than in the US or Europe. Products that take off can then be exported to the US. Strict liquor licenses make it implausible that Starbucks will be serving alcohol in the US, but ideas such as the introduction of more extensive menus and hot foods could easily find their way into US Starbucks outlets.
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