After slowed sales in the U.S., Starbucks is positioning itself for a comeback in the market with new drink options, payment options, and ordering apps.
 |
| More Starbucks locations like this will pop up in China as the coffee chain places an emphasis on this growing market. Starbucks is written in sign language on an umbrella outside the first US café staffed by employees who are partially or fully deaf and capable of communicating in American Sign Language in Washington, DC, on Oct. 23, 2018 Photo: Getty Images/Jim Watson/AFP |
By Dawn Geske, International Business Times
With its holiday drink menu in overdrive, Starbucks Corporation (SBUX) is positioning itself for a strong growth going forward. The coffee chain has seen slowed sales over the last few years in a saturated U.S. market but has its eye on China as a region that will make a difference to its bottom line.
China presents a major opportunity for Starbucks as it looks to have over 5,000 stores in the country by 2021, according to CNBC. This is up from the more than 3,400 locations in mainland China that Starbucks is currently operating.
The underappreciated market has given Starbucks a nice boost in sales to date as it saw a 7 percent growth for the country in fiscal 2017 and 6 percent growth in Q1 2018, reports Motley Fool. Starbucks sees the potential in China and is set on making this region the focus of its growth strategy near-term. The company said it expects China to outpace its giant U.S. market in terms of sales one day, according to MarketWatch.
Though don’t count Starbucks out of the U.S. market just yet. The company is continually reinventing itself with new pay and ordering options and an expansion of its beverage menu.
The company is fighting its lagging U.S. sales by addressing its low profit generating afternoons and evenings. Adding the much-needed, afternoon pick-me-up, Nitro Cold Brew to its drink menu at even more locations is an attempt by Starbucks to gain late day customers that need that jolt of caffeine. The company, which offers happy hour promotions, will also add more cold drinks to the menu that consumers tend to gravitate towards later in the day.
Starbucks is also looking to attract younger consumers with self-pay and skip the line ordering apps. These mobile options are now available to all customers instead of the customary Rewards members. This is a move the coffee giant hopes will make coffee buying a little more hassle-free for those customers that don’t frequent Starbucks on a regular basis.
Loyal customers are not out the mix as Starbucks wants them to buy more too, especially using the co-branded Visa card it launched in February. Not only can customers use the card to make purchases but they will earn reward stars to redeem for free drinks at the coffeehouse.
Starbucks has projected its stock share to reach $2.48 to $2.53 at the end of fiscal 2018.
As of Friday morning, the stock price for Starbucks was up over 9 percent.
COMMENTS