Starbucks to Expand in Malaysia - Analyst Blog


Starbucks Corporation ( SBUX ) recently announced its plans to open 100 new stores in Malaysia over the next four years. Starbucks cafes have been present in this South-East Asian market for 15 years and currently the company has 141 stores across the country.

Earlier, in April, the coffee giant had announced plans to open 100 new stores each in other lucrative South East Asian markets of Indonesia and Philippines over the next 3-4 years. Starbucks also plans to double the number of stores in Thailand over the next five years.

Starbucks already has a presence across 6 South-East Asian countries, including Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, through more than 700 stores.

The Starbucks brand is gaining popularity with consumers across Asia as the company continuously expands its store base outside the U.S. Starbucks is increasingly investing in the Asian markets, which have significant growth potential due to their relatively low per-capita consumption and burgeoning middle class population with rising income levels. This in turn is increasing the demand for convenience food and beverages.

Management believes that its China and the Asia-Pacific (CAP) segment, which has grown 33% (in terms of revenues) since 2010, will drive more meaningful business growth over the next 5 years. Starbucks' business in China is rapidly growing and the region is expected to become the company's second-largest market by 2014. The company is looking forward to take the store count in this region to 1,500 in 70 cities by 2015. Starbucks has 12 stores in the lucrative Indian market and opened its first store in Vietnam this year.

Other Stocks to Consider

Starbucks carries a Zacks Rank #2 (Buy). Some other stocks in the retail/restaurant industry that are currently doing well and are worth considering include CEC Entertainment Inc. ( CEC ) and Brinker International, Inc. ( EAT ), both carrying a Zacks Rank #1 (Strong Buy) and Bloomin' Brands, Inc. ( BLMN ), carrying a Zacks Rank #2 (Buy).

BLOOMIN BRANDS (BLMN): Free Stock Analysis Report

CEC ENTERTANMNT (CEC): Free Stock Analysis Report

BRINKER INTL (EAT): Free Stock Analysis Report

STARBUCKS CORP (SBUX): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: BLMN , CAP , CEC , EAT , SBUX

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