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Starbucks logo. / Yonhap News

Starbucks is pressing ahead with new store openings in the second half of the year despite sluggish earnings. Having opened around 90 new stores in the first half of the year alone to net a 70-store increase, the company plans to continue opening locations centered on emerging commercial districts in the latter half. With its domestic store count reaching 2,185, surpassing the 2,200-store mark is now imminent. Amid deteriorated profitability driven by declining foot traffic at existing stores, the strategy aims to preemptively secure new commercial districts to broaden long-term growth foundations while simultaneously reviving the competitiveness of legacy locations.

According to Emart on the 13th, Starbucks opened around 90 new stores in the first half of the year. Factoring in closures and relocations over the same period, the total store count rose by 70 compared to the end of last year, reaching 2,185. The net addition of 70 stores despite around 90 new openings indicates that new openings coincided with store closures and relocations. This is interpreted as a strategy to redeploy locations across specific commercial districts rather than simply inflating the raw number of stores.

The direction of its store expansion strategy has also shifted compared to the past. Rather than expanding store numbers uniformly, the company is selecting locations by analyzing profitability by commercial district and store format. This approach assesses the business feasibility of new locations by factoring in projected customer traffic, revenue, rent, labor, and other cost structures tailored to district characteristics such as office hubs, residential zones, and tourist destinations.

Another factor sustaining the store opening push is the assessment that recent earnings sluggishness does not stem directly from store expansion itself. Management believes reduced customer inflows at existing stores due to marketing-related issues have exerted a greater drag on performance than the rollout of new outlets. This rationale underpins the simultaneous pursuit of long-term investments to capture emerging commercial areas alongside the short-term priority of reviving foot traffic at existing branches.

Beyond opening new stores, Starbucks Korea continues to invest in existing outlets and operating systems. Operating entity SCK Company spent 63.7 billion won in the first half of the year on opening new stores, upgrading environments at existing locations, and enhancing systems. Alongside expanding store counts, the expenditure reflects resources deployed to sharpen existing store competitiveness and improve operational efficiency.

Efforts will also focus on drawing back existing customers during the second half of the year. Based on Starbucks Rewards (SR), the company plans to bolster member-targeted marketing, roll out seasonal promotions and new offerings, and adjust menu lineups by pruning slow-moving items. Widening customer touchpoints with members through digital channels will also be pursued in tandem.

A short-term turnaround in earnings is projected to take additional time. IBK Investment & Securities estimated that Starbucks Korea will post an operating loss of 24.2 billion won in the third quarter. This represents a steep deterioration in profitability compared to the 60 billion won in operating profit logged during the same period last year. Slower-than-expected recovery in foot traffic at existing locations remains a key headwind.

Expanding new stores is likewise difficult to view as an immediate catalyst for boosting earnings. New outlets incur fixed overhead, such as rent and labor costs, from the outset, while stable customer foot traffic and sales cannot be guaranteed right after opening. Nonetheless, certain dynamics point toward potential earnings improvements heading into the second half. Consumer spending trends have shown tentative signs of recovery, with estimated card payment totals rising last month. Consequently, analysts note that an earnings rebound hinges not on the sheer scale of store expansion, but on how effectively existing stores recover customer traffic and how swiftly new outlets stabilize operations.

An industry source in the coffee franchise sector remarked, "Opening new stores can weigh on short-term earnings due to upfront cost burdens, but it represents an investment to strengthen foundational fundamentals," adding, "Ultimately, the second half of this year and the first half of next year will serve as a testing ground where the brand must restore efficiency at existing stores while simultaneously proving the profitability of its new locations."

                                                                                                        Lee Chang-yeon