- Starbucks’ shares hit an all-time high on Thursday, with US comparable sales up 4% in the most recent quarter.
- Despite the sales growth, Starbucks’ transactions were flat yet again.
- The coffee giant has struggled to grow transactions in recent years, instead relying on stores selling more expensive drinks and customers buying more items to boost sales.
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Starbucks’ shares hit an all-time high after reporting quarterly earnings on Thursday. However, the coffee giant still has one problem it needs to solve.
While US comparable sales grew 4% in the quarter, the increase was driven entirely by an increase in average ticket size, with transactions remaining flat. Beverage sales contributed 3% of the total 4% growth in American same-store sales.
Starbucks has struggled to grow transactions in the US in recent years. Transactions were flat in the US in the last quarter after two quarters of decline.
Analysts have been pushing for Starbucks to address its inability to draw more people into coffee shops across the US.
“The comp progression of recent quarters has been reassuring that the right balance of initiatives (menu, digital) are in- place to achieve mid-single-digit comps, though we remain concerned about the minimal contribution from traffic,” BTIG analyst Peter Saleh wrote in a note on Friday, noting that the chain’s traffic remained “anemic.”
Wells Fargo’s Bonnie Herzog said in a note on Friday that she believed improvements to the in-store experience, new drinks, and a delivery deal with Uber Eats were helping fix what she had previously called Starbucks’ “traffic problem” in the US.
In 2018, Starbucks discussed how workers’ tasks are being tweaked – some work is being shifted to after hours and other tasks are being automated – in order to encourage more interaction with customers. On Thursday, Starbucks said that the company had achieved its highest level of customer-connection scores in the US since it began measuring that in 2015.
In March, Starbucks announced it is reimagining its “third place” concept, utilising new store designs to better meet customers’ needs. And the chain has added needle-disposal boxes and other solutions to help employees address complaints over messes and drug paraphernalia left in stores.
So far, these changes have failed to substantially boost traffic.
“Starbucks does not seem to be attracting all that many new audiences,” Neil Saunders, the managing director of GlobalData Retail, said in a comment in January.
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