Starbucks claims it’s becoming a destination for multiple food occasions
The data is clear: Starbucks is increasingly becoming a food destination across multiple day parts.
Food revenue jumped 19 per cent in the three months to 27 September, with its breakfast sandwich offering doubling in size from just three years ago and its burgeoning lunch menu accelerating. The business has been steadily introducing new food and drink items across its markets over the last 18 months in an attempt to give more people reasons to keep coming back to its stores day in day out.
Its expanding the lunch range through Bistro boxes, paninis and more sandwiches but it’s in the evenings where Starbucks believes gains will be made next year. The coffee seller is rolling out its "Evenings" dinner and drinks service to 100 stores initially in the US ahead of 2000 stores by 2019.
Creating an appetising dinner service with wine and snacks after work hours is one way to tempt Starbucks lovers back to stores when they would usually eat somewhere else. Starbucks knows that 60 per cent of its customers after 4pm are women and so fashioning an experience specifically for this period is key.
“…that is giving us a day part where not only is there wine, beer and our standard beverages but there is also this opportunity for sharing plates,” said Clifford Burrows, group president of Starbucks Americas, US and Teavana divisions of the expansion during its earnings call yesterday evening (29 October). It’s also eyeing up international markets, which has seen it already serve an evening menu at its Stansted Airport store and gauged London commuters’ palette for dinner at Starbucks at its experiential store earlier this month.
Mobile is set to play a pivotal role in bringing more Starbucks shoppers round to food, by pushing its menus through its mobile ordering app. Mobile payments now account for more than a fifth (21 per cent) of all transactions in its US company-owned stores, and although it only completed the rollout of its “Mobile Order & Pay” service across these outlets in September, its already tipped to generate over five million transactions per month – and that figure is growing by the hour according to Starbucks.
"We have seen the pattern of accelerated adoption of “Mobile Order & Pay” with each successive region and market we enter play out over and over again,” said Howard Schultz, chief executive of Starbucks. “And I'm pleased to report that we are seeing it again in terms of this pattern, accelerated adoption, repeated in the early days of our recent international launches of Mobile Order & Pay in both the UK and Canada."
It’s testament to the company’s decision to channel its efforts around technology rather than digital marketing per se, that’s seen it get closer than most to having a holistic view of the customer journey. Global like-for-like sales in the quarter rose 8 per cent year-on-year, up from the 7 per cent in the previous quarter.
"Starbucks occupies a front-row seat at the intersection of the physical and digital worlds like no other company anywhere in or out of retail,” added Schultz. "Our unique combination of assets that includes a growing global physical footprint of now over 23,000 stores, deep consumer engagement and trust in our brand, millions of customers every day and breakthrough mobile and digital technologies are together enabling us to extend our reach and deepen our emotional connection to customers everywhere in ways that were not imaginable even a few years ago.”