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NEW YORK - Target Corp. and Starbucks Corp. have supposedly reached an agreement to put a Starbucks coffee shop in all new Target stores beginning in fall 2003, according to Dow Jones Newswires reports.
The recent agreement will also put Starbucks coffee shops in many of Target's existing stores as they are remodeled and relocated beginning next fall, depending on each store's ability to accommodate the coffee shop, sources including Target officials told Dow Jones. It hasn't been determined what portion of Target's existing stores have that ability, according to the sources.
Minneapolis-based Target builds between 100 and 120 new discount retail stores each year, with plans to open 114 new Target stores by the end of the current fiscal year. Target remodels or relocates about one-seventh of its 1,100-store chain each year, Dow Jones reports.
The coffee shops, which will be operated by Target employees on Target-owned floor space, will pay a percentage of sales to Starbucks, sources said. Terms of the royalties agreement haven't been finalized, according to one source.
Currently, many Target discount stores have eating areas that the company calls "restaurant avenues," which serve fast food, including food from Yum Brands Inc.'s Pizza Hut and Taco Bell chains. The agreement with Starbucks isn't expected to affect those restaurant agreements, the sources said.
Starbucks coffee shops, which currently number more than 5,000 worldwide, already lease space at all 94 of the company's SuperTarget stores.