NEW YORK (Reuters) - Starbucks Corp (SBUX.O) Chief Executive Howard Schultz said the U.S. economic stimulus bill to be signed by President Barack Obama on Tuesday should help boost consumer confidence and, as a result, the coffee chain’s business.
Schultz has led the charge to shutter about 1,000 Starbucks stores around the globe since returning to the CEO post early last year. He said he does not anticipate additional store closures since the latest round of cuts announced in January already assumes a rise in U.S. unemployment.
Schultz, speaking to Reuters after Starbucks announced its new Via instant coffee product in New York on Tuesday, said Via is designed to extend the company’s reach beyond its stores.
“In the U.S., the target customer is the brewed coffee customer,” said Schultz, noting that Via is made from 100 percent arabica beans in a secret location.
Via will sell for less than $1 per cup, compared with about $1.60 for a cup of brewed coffee purchased at Starbucks.
The company will begin selling Via next month in select markets in the United States and in London. A U.S. nationwide roll-out is set for late fall 2009.
Schultz said Via is not part of the company’s new value initiatives that include discounted breakfast food and drink combinations.
“In a way we have our wind at our back because of the value proposition, but that wasn’t our intent,” said Schultz, who said the product has been in development for about two decades.
Reporting by Lisa Baertlein, editing by Richard Chang