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US retailer Target and compatriot coffee shop chain Starbucks have agreed to place Starbucks coffee shops in all new Target stores.

Dow Jones Newswires reports sources close to the situation as saying that Starbucks coffee shops will also be introduced in many of Target’s existing stores as they are revamped and relocated starting next autumn. It has not yet been decided exactly how many of the retailer’s existing stores will be fitted out with Starbucks outlets, the sources said.

Target, based in Minneapolis, builds some 100-120 new discount retail stores every year, so the deal represents a significant expansion opportunity for Starbucks. The retailer also remodels or relocates about one seventh of its 1,100-store portfolio every year.

Terms of the agreement have not yet been clarified between the two parties, but a percentage of sales will be paid to Starbucks, while Target staff will operate the coffee shops. The shops will be identical to standard Starbucks coffee shops, with Starbucks signage and decorations, and will sell the same range of snacks and drinks.

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By GlobalData