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Starbucks says it can attract more diners in the USA with new menu items and will focus on its expanding tea business, as well as capitalizing on health and wellness trends.

With about 14,000 stores domestically, Starbucks is now pumping the brakes on licensed and company-operated locations, with a renewed focus on rural and suburban areas-not over-caffeinated urban neighborhoods where locals already joke that the next Starbucks will open inside an existing store.

The company told investors late Tuesday that it expects same-store sales to grow just 1 percent for the quarter that begins next month, lowering its previous guidance.

150 stores are expected to close in the next fiscal year for the company.

A video of the arrest went viral, prompting a public backlash and the trending hashtag #BoycottStarbucks.




Competition from rivals like McDonald's and Dunkin' Donuts is heating up, said Bernstein analyst Sara Senatore in a research note. "We must move faster to address the more rapidly changing preferences and needs of our customers". Outgoing chairman Howard Schultz said the training cost Starbucks "tens of millions" of dollars.

"Our recent performance dos not reflect the potential of our exceptional brand and is not acceptable", he said. That's their lowest quarterly growth since 2009, Bloomberg.com reported.

On a conference call with analysts, CEO Kevin Johnson said those regions include the Midwest and the South, where Starbucks is far less ubiquitous than it is in Manhattan and Washington, D.C. The news was reminiscent of Starbucks' efforts a decade ago to close stores following years of aggressive expansion that led to softening comparable sales growth.

In early May, Swiss-based Nestle said it would pay Starbucks $7.15 billion for exclusive rights to sell Starbucks coffees and teas.

The closing stores are often in "major metro areas where increases in wage and occupancy and other regulatory requirements" are making them unprofitable, Johnson said.


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