Starbucks Opening Casual Dinning in LA

Starbucks Opening Casual Dinning in LA

Is Starbucks Corporation (NASDAQ:SBUX) ready to expand its product set through the 2012 purchase of the La Boulange chain of the California bakery-cafés?

After purchasing San Francisco bakery, Starbucks is making changes and launching in LA

Starbucks Corporation (NASDAQ:SBUX) is opening its first La Boulange restaurant outside its San Francisco base when a new location in Los Angeles is opened June 12.  The restaurant will be open until 10 PM and serve beer, wine, and cocktails alongside burgers and milkshakes.

The new Los Angeles outpost will have important differences from their San Francisco roots that could indicate how the Starbucks restaurant might roll out nationally. The San Francisco Bay Area La Boulange cafes primarily focus on breakfast and lunch with soups, salads and sandwiches, along with baked goods. The Los Angeles version is primarily focused on dinner.  The original cafes typically close before 7 p.m., while the Los Angeles version will remain open until 10 PM.  The design of the Los Angeles location will differ from the original version in that it will have a more “modern farmhouse” feel Starbucks spokesperson Linda Mills said.  Many of the bakery items will not change, but the build-your-own-burgers will be new along with other dishes designed for dinner.

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The Starbucks juggernaut

According to its internal statistics, Starbucks Corporation (NASDAQ:SBUX) had nearly 18,000 stores worldwide, with over 10,000 in the US.  Its annual revenue in 2012 was $13.29 billion and is considered a retail juggernaut.

Industry analysis has watched with concern when Starbucks might potentially enter a different food vertical market category. This move appears to target the upscale casual dining segment, which doesn’t necessarily have a clear set of market leaders and is often occupied by locally operated establishments.

Starbucks Corporation (NASDAQ:SBUX) continues to experiment in various segments.  The firm acquired a chain of packaged tea stores called Teavana and then opened an chain store in New York City that targeted the pricey cafe category that serves small bites and prepared tea drinks to upscale audiences.

What will happen in the future with La Boulange? “We’re going to see how this one goes,” Mills coyly responded.

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Mark Melin is an alternative investment practitioner whose specialty is recognizing a trading program’s strategy and mapping it to a market environment and performance driver. He provides analysis of managed futures investment performance and commentary regarding related managed futures market environment. A portfolio and industry consultant, he was an adjunct instructor in managed futures at Northwestern University / Chicago and has written or edited three books, including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008). Mark was director of the managed futures division at Alaron Trading until they were acquired by Peregrine Financial Group in 2009, where he was a registered associated person (National Futures Association NFA ID#: 0348336). Mark has also worked as a Commodity Trading Advisor himself, trading a short volatility options portfolio across the yield curve, and was an independent consultant to various broker dealers and futures exchanges, including OneChicago, the single stock futures exchange, and the Chicago Board of Trade. He is also Editor, Opalesque Futures Intelligence and Editor, Opalesque Futures Strategies. - Contact: Mmelin(at)
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