Starbucks’ five-year plan includes doubling food sales
Coffee has made Starbucks a household name, but food sales are going to be a big reason for the chain’s continued growth in the years to come. That’s a key takeaway from Starbucks’ biennial investor conference yesterday, where the chain announced plans to drive foods sales and expand sales of beer and wine to several hundred more stores in 2015.
The rollout of Starbucks La Boulange line of baked goods and sandwiches has helped boost same-store sales growth in recent quarters by two percent. The chain is looking to build on that success in the years to come with added sales during breakfast and other day parts.
Starbucks has identified lunch as a major opportunity for the chain to boost revenues and profits. For its 2014 fiscal year, the chain saw year-over-year lunch sales grow 14 percent. The chain has been testing new sandwiches designed for the lunch crowd and is confident in its new product pipeline, where items go from initial development to test within six months.
As several reports point out, Starbucks is increasing its menu offerings at a time when others, most notably Burger King and McDonald’s, are trimming items to provide customers with faster service.
Starbucks also has its sights set on expanding what the chain calls its "Evenings" program, which includes beer, wine and fruit-and-cheese plates. According to the company, stores with this program saw a sales lift in the mid to high teens for the day-part. Starbucks expects that it will eventually have evening service in place at up to 25 percent of its store base in the U.S. The chain has concentrated on bringing the program to stores in urban areas and those near theaters and restaurants to capture customers out for a night on the town.
Cliff Burrows, group president for the Americas, said (via Bloomberg News) that the Evenings program was most successful with the chain’s women customers who "enjoy meeting friends for a glass of wine in the evening."
- 2014 Biennial Investor Day (webcast) – Starbucks
- Starbucks Expanding Lunch Menu in Bid to Draw U.S. Diners – Bloomberg News
- Starbucks brews up five year growth plan; shares flirt with all-time highs – USA Today
- Starbucks aims to double food sales in five years – The Wall Street Journal (sub. required)
- Why Starbucks Has Bulked Up Its Menu to 255 Items – The Wall Street Journal (sub. required)
- Starbucks to expand alcohol sales, partner with Oprah – RetailWire
- Dunkin’ and Starbucks go after the lunchtime crowd – RetailWire
Is Starbucks on the right track turning its attention to growing day-parts beyond breakfast? Do you think the chain has a greater opportunity to drive incremental revenues during lunch or evenings?