Target Teaming with Starbucks

Starbucks coffee shops will be built in all new Target stores beginning in fall 2003, Dow Jones Business News reports.

The agreement between Minneapolis-based Target Corp. and Seattle's Starbucks Corp. will also put Starbucks coffee shops in many of Target's existing stores as they are remodeled and relocated beginning next fall, sources told the news service.

The coffee shops will be fully outfitted with signage and decorations bearing the Starbucks logo, and will serve food and snacks in addition to coffee, just as stand-alone Starbucks coffee shops do. The coffee shops, which will be operated by Target employees on Target-owned floor space, will pay a percentage of sales to Starbucks.

Target builds 100 to 120 new discount retail stores each year, with plans to open 114 new Target stores by the end of the current fiscal year. Target also typically remodels or relocates about a seventh of its 1100-store chain each year.

Starbucks coffee shops, which currently number more than 5000 worldwide, already lease space at the company's 94 SuperTarget stores, which add full-line grocery stores to general merchandise offerings. Starbucks has also expanded its store base through pacts with other major retailers, including Barnes & Noble Inc., as well as publicly operated facilities, such as libraries.