Starbucks to launch smoothie line next week

LOS ANGELES,, July 11 Fri Jul 11, 2008 6:27pm EDT

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LOS ANGELES,, July 11 (Reuters) - Starbucks Corp (SBUX.O) is preparing to launch a line of smoothies next week, according to advertising at stores in several U.S. cities.

Signs in at least four coffee shops in Los Angeles and Chicago said the smoothies, called "Vivanno Nourishing Blends," will hit stores on July 15. Employees at stores in New York, Washington and San Francisco also confirmed the launch of new smoothies next week.

Starbucks would not comment on it.

A Washington, D.C. store gave out samples, saying the drink will have 250 calories. The new smoothies come in two flavors, Orange Mango Banana and Chocolate Banana, according to a sign in a Los Angeles store.

"Starbucks hasn't had real meaningful innovation in its stores in the past couple of years," said John Owens, a restaurant industry analyst with Morningstar Inc. "(The smoothies) are one of several initiatives Starbucks has in place to breathe life into their new brands."

The new drinks will mean increased competition for smoothie chains such as Jamba Inc (JMBA.O), Owens said.

The smoothies are being rolled out as Starbucks is scrambling to increase sales at its U.S. coffee shops. Demand for the company's premium-priced coffee drinks has softened as consumers deal with a housing downturn and higher prices for food and energy.

Competitors like Dunkin' Donuts and McDonald's Corp (MCD.N) are also chipping away at Starbucks' business with cheaper espresso drinks and iced coffee.

To help revive profits, Starbucks said on July 1 it planned to close 600 poorly performing U.S. stores and cut up to 12,000 jobs. On a conference call that day, Chief Financial Officer Pete Bocian said Starbucks would be rolling out a line of smoothies nationwide in mid-July. (Additional reporting by Erin Zureick in Chicago, Lisa Baertlein in San Francisco, Martin Howell in New York and Diane Bartz in Washington) (Reporting by Jennifer Martinez in Los Angeles; editing by Nichola Groom)

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