The Starbucks that will emerge on the other side of the global pandemic won’t be the same brand from 18 months ago, according to CEO Kevin Johnson, who has dubbed this stage in the COVID recovery the ‘Great Human Reconnection.’
Johnson has explained that while the human connection is the very foundation of the Starbucks experience, how the coffee chain reaches, and courts guests has progressed years in a matter of months. Starbucks can meet customers where they need to be, Johnson said, in ways that it couldn’t pre-virus.
The brand posted Q3 year-over-year revenue growth of 78 percent, up to $7.5 billion—a figure the chain has never reached. Just in the U.S., revenues lifted 92 percent to $5.4 billion (from $2.8 billion Q3 2020) as corporate same-store sales jumped 84 percent off the COVID floor this time last year.
Yet even pulled back to offer a clearer view (same-store sales fell 40 percent in the U.S. in the prior-year period), Starbucks’ two-year comp grew 10 percent. Transactions rose 82 percent this quarter compared to last year’s negative 53 percent drop, while ticket continues to hike as larger orders edge out solo trips, up 1 percent versus a 27 percent leap in Q3 2020.
It's Starbucks adaptation to new consumer behaviours that have made the most difference. Drive-thru represented 47 percent of transactions for Starbucks in the period. Mobile ordering for in-store pickup delivery or curbside totalled 26 percent.
Starbucks made equipment investments to improve efficiency and consistency as well. New espresso machines are live at 70 percent of U.S. corporate venues, with a complete rollout expected by fiscal 2022. Another big rollout for the brand is automated inventory ordering, the system removes inventory tasks from employees and allows them to focus on guest-facing activities.
Starbucks ended the period with 18,175 stores in the Americas (15,348 U.S.), down from 18,235 this time a year ago. Globally, the chain opened 352 net new units to get to 33,295 locations.