Despite closing down a number of Canadian stores in recent years, coffee giant Starbucks is back in growth mode in the country opening new locations, new concepts and its first-ever collaboration with a First Nation.
As of January 1, there were 1,429 Starbucks in Canada – 956 company-operated stores and 473 licensed stores.
“We think there is no shortage of opportunity for Starbucks in Canada for sure,” said Shannon Leisz, Vice President, Operations and Business Development, Licensed Stores in Canada.
“We’ve been in Canada for more than 35 years but there’s no two ways about it, there’s a lot of growth. There’s still very much that we can do around our growth strategy.
“We’re continuing to look at ways to diversify, modernize and build and grow our portfolio to meet our customers in the way that is most meaningful to them. And that could be any time of day, any format, etc. When I think about what that means across Canada, we believe there is a role that we have to play really in all of our communities for growth. That could be expansion in urban, that could be continued growth in suburban and even remote markets. It’s hard to believe but there are still some communities and municipalities that don’t yet have Starbucks and we know that there’s a need and want for that.
“We’re excited. We’re definitely in growth mode and we’re excited to keep building on decades of experience and growth.”
She said part of any good practice is always looking at your portfolio and adjusting to the market.
“We had like a five-year trajectory on where we would want to re-position the portfolio through doing either strategic relocation or closure. So in 2020 when we really looked at what was happening as a result of COVID, we just saw that there was an opportunity to take that five-year transformation strategy and condense it into 18 months. And really that was intended to rapidly get ahead and evolve where customers needed us and wanted us, what their preference in demand was. So we took that opportunity to just do that in a much faster timeline,” said Leisz.
“Anything that we want to do is making sure that we integrate technology, innovation, how our customers want to utilize us. What are we thinking about in terms of urban re-entry for Starbucks especially in Toronto? In those dense, metro, urban, CBD (central business district) areas for sure we’re committed to bringing Starbucks back to provide more choice and more convenience for our customers.
“So we think about how do we create this ecosystem in this trade area that creates a blend of traditional Starbucks cafe locations with also new more convenient forward formats. If you think about downtown Toronto, we opened a store on Yonge and King and that’s an awesome cafe with seating but a block away from that we’ve got Commerce Court which is a pickup only. So again it’s this ecosystem we’re creating of how customers want to interact with us.”
A new store will be at 16 York Street to service predominantly the financial community and tourists in the busy downtown core with a format that is optimized for Mobile Order & Pay. This will include a larger order hand-off area for partners to better serve customers, as well as some seating for customers while they wait for their handcrafted beverage to be made. Anticipated opening is Summer 2023.
Starbucks is also growing its licensed side and now operates at several university locations in a variety of store formats. It currently has stores that are licensed locations at schools like University of Western (two stores), University of Guelph (three stores), University of British Columbia (three stores), University of Calgary (two stores) and Dalhousie University (one store).
She said Starbucks has been known as an innovator and the company’s experience is finding new ways and impactful ways to connect with customers through integrating the very best of Starbucks with physical and digital customer experience through formats and designs.
“If we look to innovate even through how our designs show up and look, modern design is important because it really embraces familiarity and the Starbucks brand as well as variety,” said Leisz. “We try to really do our best to enhance that third-place no matter what format it is and create something that feels unique and memorable and special for each one of our stores.
“We’re poised for growth. We are excited. We think we have a big, long runway ahead of us and we really are excited about the growth and the development that we have to meet customers where they’re at and provide the very best experience for them.”
In early March, Starbucks Canada and We Wai Kai Nation, in BC, broke ground on a new Starbucks store. The location will be operated by the We Wai Kai Nation, making this a first-of-its-kind collaboration for Starbucks in Canada.
Leisz said this marks the beginning of what is possible for Starbucks and First Nation communities in Canada. It is the first partnership with an Indigenous licensed operator.
“We believe companies have a position or something that they can all play an active role in around truth and reconciliation, learning more, being a good citizen. Just learning about Indigenous culture,” she said. “So last year there was a small group of us that had the chance to go to Cando which is the Council for the Advancement of Native Development Officers.
“So it really is about economic development and there we met Jason Wilson, (Manager of Economic Development for We Wai Kai Nation). Coming out of that we knew that there were things that we could explore on how we wanted to work together and this potential partnership. Through that discovery and conversation, we came together and we’re opening that first Indigenous-led cafe in Canada in Campbell River.”
The intent is to open the location by the Fall of this year.
Wilson said the We Wai Kai Nation (Cape Mudge Band) current population is approximately 1,200 citizens and about half live on reserve (split between Cape Mudge Village, Quadra Island and Quinsam Reserve, Campbell River), and the other half live off reserve. The We Wai Kai are part of the Ligwiłdaxw (Laichwiltach), the southern-most tribes of the Kwakwak’awakw peoples.
“The nation was looking to expand the service offering within its Quinsam Crossing development in Campbell River and was looking to add a business that would not only complement existing services, but also be its own draw for customers. A drive thru coffee shop seemed to fit nicely,” he said.
“Starbucks was chosen as numerous staff members and council members enjoy going to Starbucks – sometimes daily and there appeared to be an opportunity with one of the local Campbell River corporate owned and operated stores closing due to inability to add a drive thru. We reached out initially to see if there was an opportunity to lease land to Starbucks Canada, but there wasn’t an interest in adding another corporate store in close proximity. The discussion then led to a licensed opportunity and it was discovered very early in discussions that all though there were numerous Starbucks across Canada on reserve lands, none were operated by a First Nation. This led to We Wai Kai Nation signing the first such license agreement in Canada.”
Leisz said it would be great for Starbucks to continue to expand with other partnerships like that with other First Nation communities.
“We really think that that moment that we had with We Wai Kai marks the beginning of what is possible for other First Nation communities across Canada,” she said. “I think it’s so important for companies like ours to continue to listen and to learn and work side by side with these communities and we hope to do more.”