Starbucks to Invest $275M in Partners and Digital
In quarter one, Starbucks delivered a 12% increase in revenue to a record $5.4 billion, despite the significant investments the company continues to make in its partners and its business. Starbucks expects investments in its partners and digital initiatives to total between $275 million and $300 million globally in 2016 compared to approximately $145 million in fiscal 2015.
Quarter one was also Starbucks' third sequential quarter of a 4% increase in global traffic. This holiday season, the company offered Holiday Spice Flat White and an expanded holiday food platform. It also leveraged its digital assets to reward loyal customers with five specialized Very Monday offers throughout the holiday season. Those offers, combined with the Starbucks for Life sweepstakes, open only to My Starbucks Rewards (MSR) members, drove customer traffic and increased MSR loyalty membership. The company increased the number of active MSR members in the U.S. to 11.1 million, up 23% over Q1 last year.
"You've got to ask yourself what's going to happen to the future of many of those malls that are anchored by those big-box retailers," CEO Howard Schultz said, commenting on the recent news of Macy's and Walmart store closures. "Having said that, the investments that we made in our partner investments, which is store execution and retention of our people and the intimate relationship we have with the customer, coupled with the technology investments which have been significant, put up 4% traffic in this environment when there isn't a retailer in the country that is putting up anything close to 1% or 2%, let alone 9% comps in the quarter in the U.S. business, and we finished very strong for the quarter."
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Quarter one was also Starbucks' third sequential quarter of a 4% increase in global traffic. This holiday season, the company offered Holiday Spice Flat White and an expanded holiday food platform. It also leveraged its digital assets to reward loyal customers with five specialized Very Monday offers throughout the holiday season. Those offers, combined with the Starbucks for Life sweepstakes, open only to My Starbucks Rewards (MSR) members, drove customer traffic and increased MSR loyalty membership. The company increased the number of active MSR members in the U.S. to 11.1 million, up 23% over Q1 last year.
"You've got to ask yourself what's going to happen to the future of many of those malls that are anchored by those big-box retailers," CEO Howard Schultz said, commenting on the recent news of Macy's and Walmart store closures. "Having said that, the investments that we made in our partner investments, which is store execution and retention of our people and the intimate relationship we have with the customer, coupled with the technology investments which have been significant, put up 4% traffic in this environment when there isn't a retailer in the country that is putting up anything close to 1% or 2%, let alone 9% comps in the quarter in the U.S. business, and we finished very strong for the quarter."
To read this article in its entirety, click here.