Centam Coffee-Starbucks expands shops in Mexico as U.S. slows

By Mica Rosenberg

MEXICO CITY, Feb 27 (Reuters) - Dozens of new Starbucks stores will open this year in Mexico, according to the chain's Mexican partner, part of an overseas expansion plan that could offset slower sales in an oversaturated U.S. market.

Fast-food franchiser Alsea (ALSEA.MX: Quote, Profile, Research) has opened 201 Starbucks (SBUX.O: Quote, Profile, Research) coffee shops since the brand first entered Mexico just over five years ago and now stores are popping up around the country at one of the fastest rates in the world.

Alsea, which also operates Domino's Pizza (DPZ.N: Quote, Profile, Research) and Burger King (BKC.N: Quote, Profile, Research) restaurants, will open at least 80 new Starbucks stores in 2008 and wants to keep that pace over five years as Mexico's middle class grows and picks up on U.S. coffee drinking trends.

"When we opened our first store in 2002 we were opening an average of one store a month. Now were are up to six or seven a month," said Gerardo Rojas, who manages the Starbucks brand for Alsea.

"We have stores in 23 cities and the idea is to open in more than 10 new cities this year. We want to continue with this aggressive growth," Rojas told Reuters in an interview.

The rapid expansion in Mexico could help offset store closings, layoffs and slumping stock prices in the U.S. market where an economic slowdown has affected sales.

Starbucks share prices have been falling steadily since May of last year when its stock was above $30.

In January, the coffee giant announced it was closing 100 underperforming U.S. stores and slowing new domestic openings. Last week the company announced it would slash 600 U.S. jobs.