GEISHA KOW­LESSAR-ALON­ZO

With a $5.8 mil­lion dol­lar in­vest­ment in the heart of down­town Port-of-Spain, cof­fee com­pa­ny Star­bucks is not on­ly un­de­terred by the crime sit­u­a­tion, but is con­fi­dent that its newest lo­ca­tion will in­crease its al­ready grow­ing cus­tomer base.

Pub­licly list­ed, Pres­tige Hold­ings Ltd holds the fran­chise for Star­bucks in T&T and the lo­cal com­pa­ny's CEO Si­mon Hardy spoke to Busi­ness Guardian at Tues­day's open­ing, de­tail­ing what it took to to bring the store to fruition, fu­ture plans as well as on oth­er is­sues.

Of the the $5.8 mil­lion in­vest­ment, Hardy said "a large part,"about $3 mil­lion, was spent on lo­cal con­trac­tors and lo­cal sup­plies to retro­fit the store.

On the lease rental of the space, Hardy said he could not share such de­tails, say­ing that was con­fi­den­tial.

Sourc­ing for­eign ex­change to meet the grow­ing needs of any en­ti­ty can be a chal­lenge and for Star­bucks, Hardy said ther was no ex­cep­tion.

"It is a con­tin­u­ous chal­lenge for us but that is part of our ex­pan­sion plan. It is about di­ver­si­fy­ing out­side of Trinidad and To­ba­go and be­ing to op­er­ate in mar­kets that have more free avail­abil­i­ty of for­eign ex­change to help to bal­ance the books so to speak...but it is a chal­lenge for all of us op­er­at­ing when we have to im­port goods and we have to find the for­eign ex­change," Hardy ex­plained.

As crime re­mains wor­ry­ing for many busi­ness­es, in­clud­ing those lo­cat­ed in the cap­i­tal Hardy how­ev­er, said he is not fazed that this will im­pact op­er­a­tions.

"I'm con­cerned about crime over­all in the coun­try. I'm not par­tic­u­lar­ly con­cerned about Port-of-Spain be­ing a par­tic­u­lar hot spot com­pared to the rest of the coun­try. Ob­vi­ous­ly, we are aware of the sit­u­a­tion in the coun­try; we have our se­cu­ri­ty pres­ence. Ob­vi­ous­ly, we would look at our op­er­at­ing hours but I don't think that it is some­thing, that is In­de­pen­dence Square and Port-of-Spain, which stands out from the rest of our stores," he said.

Lo­cat­ed at the cor­ner of Cha­con and In­de­pen­dence Square, the spot once housed fast food joint Mc­Don­ald's which pre­vi­ous­ly had a restau­rant there be­tween May 6, 1997 and Oc­to­ber 25, 2003. The Mc­Don­ald's closed due to low sales.

Then in 2017, the Telecom­mu­ni­ca­tions Ser­vices of T&T (TSTT), which had tak­en over the lo­ca­tion as a re­tail out­let, closed as it en­tered the next phase of its dig­i­tal trans­for­ma­tion.

How­ev­er, Hardy main­tains the area is lu­cra­tive.

"We have been co­or­di­nat­ing with de­vel­op­ers as well as our fran­chisor, Star­bucks In­ter­na­tion­al, which has to ap­prove all sites that we do. So we found this lo­ca­tion which we felt is per­fect­ly lo­cat­ed. We are near to all the banks, there's the T&T Stock Ex­change, Nicholas Tow­ers and a lot of great busi­ness­es near­by," he ex­plained.

With a space of 1,600 square feet and a seat­ing ca­pac­i­ty of 35 peo­ple at any giv­en time, Hardy not­ed this is the first pedes­tri­an store for Star­bucks Trinidad.

"A lot of the cus­tomers we ex­pect at In­de­pen­dence Square might be grab and go. They are on their way to the of­fice ear­ly in the morn­ings or grab­bing some­thing for lunch and then go­ing back to the of­fice. This is a bit dif­fer­ent from the cafes you would have seen at Movi­etowne or South Park where peo­ple would more sit down. This is an ur­ban, pre­dom­i­nant­ly pedes­tri­an store..this is re­al­ly serv­ing the in­ner city cus­tomers ver­sus those who are dri­ving," Hardy added.

This is al­so the first Star­bucks to be lo­cat­ed down­town Port-of-Spain with sev­er­al oth­er cof­fee shops al­ready with­in walk­ing dis­tance.

Hardy, how­ev­er, is not wor­ried by the com­pe­ti­tion.

In fact, he be­lieves it's a good thing.

"I think you will need to ask our com­peti­tors how Star­bucks com­ing here af­fects their prof­itabil­i­ty...I think com­pe­ti­tion is good for every­one. It dri­ves us to con­tin­ue to im­prove our of­fer­ing to what we bring to cus­tomers and our com­peti­tors al­so end up hav­ing to el­e­vate their op­er­a­tions such that the cus­tomer ul­ti­mate­ly ben­e­fits," he said.

Fur­ther, Hardy not­ed that Star­bucks op­er­ates in close prox­im­i­ty to its com­peti­tors, em­pha­sis­ing that the com­pa­ny of­fers "some­thing unique" which draws a gath­er­ing.

As to what gives Star­bucks the com­pet­i­tive ad­van­tage, he boast­ed this en­tailed a num­ber of fac­tors in­clud­ing "ab­solute­ly fan­tas­tic as­sets, bring­ing the best in world-class cafe de­signs to T&T."

In ad­di­tion, he said all the Star­bucks stores are be­ing built ac­cord­ing to green­er cer­ti­fi­ca­tion as Star­bucks in­ter­na­tion­al de­mands.

On the most prof­itable Star­bucks store in T&T, Hardy said that in­for­ma­tion is not dis­closed ac­cord­ing to stores, Het not­ed that the big­ger lo­ca­tions like South Park and Aranguez, which are al­so "dri­ve-thrus" are among the most pop­u­lar.

Us­ing lo­cal goods can great­ly help the econ­o­my and Star­bucks has been as­sist­ing in this re­gard.

For in­stance, Hardy said some of the sand­wich­es are sourced from a lo­cal sup­pli­er.

"We al­so use some of the in­gre­di­ents that are im­port­ed by lo­cal dis­trib­u­tors who we buy from, but ob­vi­ous­ly a large part of what we serve is sourced di­rect­ly from Star­bucks In­ter­na­tion­al. Those are the rules by which we are bound but we try to sup­port as much lo­cal busi­ness as pos­si­ble," Hardy ex­plained.

What's next for Star­bucks?

Hardy said while new lo­ca­tions are kept close at hand so as to avoid tip­ping off com­peti­tors, he not­ed, how­ev­er, that a sec­ond cafe was re­cent­ly opened in Guyana.

"We are look­ing at a com­bi­na­tion of both Guyana and Trinidad in terms of our store growth plans," Hardy added.

Re­gard­ing whether there are any oth­er coun­tries in the re­gion which, were al­so marked as the com­pa­ny ex­pands its foot­print, he said this was "all sub­ject to dis­cus­sions."

Star­bucks is part of Pres­tige Hold­ings Ltd.

In­cor­po­rat­ed in 1972, Pres­tige Hold­ings Ltd (PHL) is a restau­rant man­age­ment com­pa­ny which op­er­ates the KFC, Piz­za Hut, TGI Fri­days, Sub­way and Star­bucks brands in T&T as well as oth­er Caribbean Is­lands.

Ac­cord­ing to the com­pa­ny's con­sol­i­dat­ed unau­dit­ed re­sults for the three months end­ed Feb­ru­ary 29, 2024, PHL en­joyed a strong per­for­mance for its first quar­ter of fis­cal 2024 as its prof­it af­ter tax in­creased by 25 per cent from $7.8 mil­lion to $9.8 mil­lion.

The re­sults not­ed that group sales in­creased by 10 per cent to $341 mil­lion from $309 mil­lion in the pri­or year, which re­sult­ed in a prof­it be­fore tax of $15.3 mil­lion com­pared to a prof­it of $11.6 mil­lion for the same pe­ri­od in 2023.

That was a 32 per cent in­crease.

In com­ment­ing on the com­pa­ny's per­for­mance, Pres­tige chair­man, Chris­t­ian Mout­tet, in his state­ment, fur­ther not­ed, "Cash flow from op­er­a­tions was $26.9 mil­lion and we end­ed the quar­ter with $100 mil­lion in cash hav­ing re­duced to­tal bor­row­ings by $5.8 mil­lion. Dur­ing the pe­ri­od we re­mod­elled two restau­rants and end­ed the pe­ri­od with 134 restau­rants."