Thursday, November 5, 2015

Starbucks More Food, More Lunch, More Dinner, More Cheer

Success does leave clues and Starbucks is a brand nearing 50 years in the making and they continue to post industry leading top line sales and bottom line profits.  Howard Schultz understands that the consumer is dynamic and brands must be as well.  Foodservice Solutions® Grocerant Guru® calls Schultz” the foodservice industry best merchant.” 

Once again Starbucks posted very solid 9 percent same-store sales gain for the third quarter. Starbucks outline what initiatives for sustaining growth would look like going forward. Here are three:

More Take-Out / To-Go Lunch sales during the A.M.

Domestic stores are assembling what management calls the Wall of Chill, an area showcasing refrigerated lunch and snack items that customers can pre-order and pay for on their phones and then grab in the morning when they pick up their coffee. The notion is to provide foods that are just as easy to grab on the run as beverages ordered through the chain’s Mobile Order & Pay service. 

More Dinner / Evening Food and Alcohol sales

About 100 units now offer a menu of shareable plates in the evening, along with beer and wine selections, and “we're going to open several hundred more during the year,” said Cliff Burrows, president of domestic operations for Starbucks and its sister brand, Teavana.

More Music for The Third Place 

A previously announced collaboration with Spotify, the online music service, will begin in a few weeks, revealed Kevin Johnson, president of the whole company. The partnership will enable in-store customers to vote on what songs should play over the sound system. Johnson said the upshot would be a “rich digital musical experience.” Users of Spotify will also be rewarded for purchases with points redeemable for foods and beverages from Starbucks via the latter’s Stars loyalty program.

More Merchant Means More Holiday Cheer

Johnson revealed during the chain’s quarterly analyst call that Starbucks intends to make the year-end holidays particularly merry through a series of enhancements. He explained that Starbucks’ online gift shop will be expanded to provide more gift ideas, with promotional tie-ins at the store level. Unit visitors will also find new holiday drinks available this year, including a riff on the Flat White.  Finally, management spoke cryptically about efforts to promote holiday gift cards, which were loaded with $1.6 billion in Starbucks credits in the holiday season of 2014.

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