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Starbucks details plans to boost traffic

SEATTLE Starbucks Corp. said it is taking a number of steps to bolster the chain’s appeal to customers, including the rollout of a new premium brewing system, the launch of a frequent-customer program, and the setup of a social-networking website where consumers can post feedback and provide new product ideas.

The company also said it is discontinuing tests of a $1 “short” size of coffee, which was offered with free refills.

Addressing shareholders at their annual meeting here Wednesday, Starbucks detailed plans to push premium coffees in part through the introduction of a new coffee brewing system. Officials disclosed that the coffee giant is buying the company that makes the Clover system. The machine uses a proprietary brewing process, which officials described as a combination of the French press and vacuum cup methods, to produce a premium cup of coffee. Starbucks said in February that it was testing the Clover machines in Seattle and Boston.

Starbucks chairman and chief executive Howard Schultz said the acquisition of Clover's creator, The Coffee Co., was the "largest single initiative" of those being undertaken by the coffeehouse giant in an effort to return to what Schultz has termed the "Starbucks Experience."

Starbucks also said it would roll out a new semi-automated espresso machine, called the Mastrena, that officials said would give baristas more control over making espresso and steaming milk. Starbucks noted that the new machines have a "lower profile" that will allow more interaction and eye contact between baristas and patrons.

The company did not disclose the capital investment needed to add the new espresso machines, which executives said would be in 30 percent of the system by the end of this year and in 75 percent of stores by 2011.

Another initiative the company revealed on Wednesday was the introduction of a loyalty program for Starbucks Card holders. In April, registered cardholders will get such benefits as free refills of drip coffee, a free tall-sized drink with the purchase of a pound of whole bean coffee, and free customization options with syrups and milk alternatives, like soymilk and half-and-half. Starbucks said earlier this year that registered cardholders would get two hours of free wireless Internet access in stores starting this spring.

In an effort to get customer feedback, Starbucks said on Wednesday that it has launched MyStarbucksIdea.com, a social networking site where users can share comments and make suggestions for the chain.

Other moves that Starbucks disclosed at the meeting include the addition of a new coffee blend called Pike Place Roast; a stronger commitment to conservation; and the development of energy and health-oriented products.

Since Schultz resumed day-to-day operations of Starbucks in January, the chain has rolled out a variety of initiatives to drive traffic, boost sales and increase profits. Those steps have included several management changes and the cutting of hundreds of jobs, many of which were at the chain's headquarters. The company also has said it would close 100 underperforming stores, slow domestic expansion and ramp up growth overseas.

Starbucks has more than 7,000 coffeehouses in the United States.

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