While famous coffee chain Starbucks Corp reached their highest quarterly sales gain, they are still having problems to attract more customers to stores found in the United States. Starbucks shares rose 9% on Thursday from after-hours trading. They reported that they beat their expectations of same-store sales growth by 2-3%. This growth came from a rise in the average ticket.
The rise was approximately 5% which is surprising because the number of transactions fell 1% last year. Rosalind Brewer, the Operating Chief at Starbucks stated “Transaction growth is our largest opportunity” due to the new menu that was added towards the end of the quarter. Although Starbucks may be happy that it reached their highest quarterly sales gain, there are still competition such as Dunkin that offer lower-prices to consumers that can affect the next quarterly sales.
This news allowed the newly elected Chief Executive Kevin Johnson to gain appraisal for what he has done for the company. The company is now focused on getting to know their customers much better, so they can create more offers that will target newer customers as well. The newly opened application Starbucks created allows customers to sign up for the rewards program which brought in 4 million new customers.
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Starbucks is a famous company that everyone has tried at least once in their lives. Their customer loyalty and rewards program are super effective in attracting customers because many want to be part of this wave of “collecting stars”. The loyalty program currently has 15.3 million active members and is continuing to grow, which is 15% higher than what it was a year ago.
The weaker time that Starbucks receives is during the afternoon. To counter this, they are making healthier Frappuccino drinks because they were a leading afternoon drink that many customers purchase. Starbucks is also trying to cater to convenience so they’re creating more stores with drive-through windows that bring in more sales compared to stores that don’t have this window.
After reading this article, I was able to learn more about what Starbucks does to gain more customers or to fix their slow traffic in the afternoon. This was interesting to know because I assumed that customers would be at Starbucks at any time of the day but clearly there are times where there is slower traffic. They have a plan ready to combat this to show that they’re ready to bring sales up in an area that seems to be doing slow.
