Starbucks run may be thing of the past
The afternoon coffee run may become a thing of the past if Starbucks Corp. gets its way.
The world's largest coffee-shop chain said Thursday it would offer delivery in select markets in the second half of next year. Chief Executive Officer Howard Schultz described the plan as "e-commerce on steroids," letting customers create standing orders that arrive at their desks daily.
The move is part of Starbucks' strategy to keep U.S. sales growth humming along at a time when consumers are pulling back on discretionary purchases and mobile-phone applications have trained them to seek more convenience. While sales at Starbucks' established stores in the Americas rose 5 percent in the quarter through Sept. 28, that was less than the 6.2 percent growth analysts expected.
The chain's mobile app — which lets customers pay and earn rewards points just by scanning their phones — has 12 million "highly active" users, Chief Digital Officer Adam Brotman said yesterday on a conference call to discuss third-quarter earnings. All told, about 16 percent of all U.S. Starbucks store transactions are from a mobile device, Schultz said on the call yesterday.
"No company and no retail store, domestically or internationally, even comes close," he said.
Customers at cafes in Portland, Oregon, will be able to place orders through the app next month, and the order-ahead program will be rolled out nationally next year. Delivery would be a logical extension of that.
"We understand that there is a macro issue and a consumer shift," Schultz said. "We are playing offense."