Starbucks has released a new limited edition frappe and it is purple but tastes like oranges! Keri Lumm reports.
The company said Thursday that it saw a 4 percent increase globally in the average check during its fourth quarter, the three months ending Sept. 30. For fiscal year 2018, there was a 3 percent increase in the average ticket.
That, in turn, drove sales at Starbucks locations open at least a year — an industry measure that takes a chain’s unit growth into account — to grow 3 percent.
Though the Seattle-based coffee chain has cut the number of limited-time offer drinks, it has been gaining with its new coffee and juice offerings, according to the company
Plus, autumn brought with it a boost from the return of the iconic Pumpkin Spice Latte.
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“It is evident that the healthy consumer economy has stimulated higher spend on small treats and indulgences — including coffee and snacks,” said Neil Saunders, managing director of GlobalData Retail. “This has encouraged existing customers to trade up or to buy more while in store. Interestingly, it seems to have had less of an impact in terms of the number of people visiting Starbucks, which has not moved by as much as might be expected, especially among less mature consumers.”
He also credits more spending to the ongoing remodeling of Starbucks stores — which encourages lingering and with that, spending more money, especially on food items — and to the company’s focus on the afternoon, backed by loyalty-based discounts, such as Happy Hour deals.
Starbucks reported fourth-quarter revenues of $6.3 billion and adjusted earnings per share of 62 cents, beating Wall Street estimates. Refinitiv forecast $6.28 billion and 60 cents.
The company unveiled its four new holiday cup designs, three new pastries and its first-ever reusable plastic holiday cup earlier on Thursday.
Here are three other points Starbucks observers took note of during the analyst call:
No need to come in
Starbucks is testing delivery in the Miami area.
The experiment with Uber Eats began at 100-plus stores in the Miami area in September.
“We’re always testing new products and experiences for our customers and are excited to share more details soon,” the company said.
Starbucks’s has already tried delivery with Postmates.
Cold is hot
While Starbucks is best known for its hot coffee, the chain is also solely responsible for adding the word Frappuccino to the world’s vocabulary. And those are served cold.
The Cold Brew and Refreshers offerings are also part of that fridge-friendly line-up.
“We’re seeing customers adopt cold beverages across all day parts and seasons,” Brewer said.
The customer remains key
Starbucks continues to reduce tasks that take up store employees time in order for them to increase interactions with customers. One example Brewer mentioned was automated inventory.
In addition, Starbucks Rewards, the brand’s loyalty program, continues to grow, according to the company. It’s up to 15.3 million active members, a year-over-year jump of 15 percent .
There’s the famous ad slogan “The best part of waking up, is Folgers in your cup.” But when’s the best time to wake up and enjoy the coffee? Buzz60’s Mercer Morrison has the story.
Follow USA TODAY reporter Zlati Meyer on Twitter: @ZlatiMeyer
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