In Japan, Starbucks wakes up and smells the coffee

Ian Messer Bloomberg News Tuesday, May 20, 2003
Competition leads Japan unit to a loss

TOKYO Has the froth come off of Starbucks' cappucinos in Japan?

On Tuesday, Starbucks Coffee Japan Ltd. said it lost money last year and added that it would slow the pace of new store openings and said cut payroll costs to restore profit.

Japan has been a major source of profit for Starbucks, but growing competition from Japanese and foreign rivals selling espresso-based coffee drinks has begun to squeeze margins.

Underscoring the increasing elusiveness of profits, a trendy U.S. rival, Peet's Coffee Tea Inc., said it was closing its last store in the country, a little over a year after it arrived.

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