Digital Loyalty Lifts Starbucks Q1 to Record $7.1 Billion

Rewards members grew 17 percent year-over-year, now totalling over 18.9 million active members

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Need to Know

  • Starbucks Q1 reports growth in its Starbucks Rewards loyalty program with a 16 percent year-over-year increase in members. 
  • Starbucks Rewards now has over 18.9 million active members in the U.S – active members are defined as those having active memberships for over 90 days. 
  • The coffee-chain reported revenues of $7.1 billion for Q1 fiscal year 2020.
  • Global comparable-store sales rose 5%, driven by a 3% increase in average ticket and a 2% increase in comparable transactions. 

Analysis

Loyalty grew for Starbucks in Q1, validating the coffee chain’s recent shift towards more digitally focused offerings and programs. 

In a call with analysts CEO Keven Johnson said that the company added a record CEO Kevin record 1.4 million customers Starbucks Rewards member base, ending the quarter with 18.9 million active members. The increase marks a lucrative 16 percent year-over-year rise. “We know from experience that when customers join our rewards program their total spend with Starbucks increases meaningfully,” Johnson said on the call.  

Assuming Johnson is correct, the membership increase could account for the sales growth the company saw in the same quarter. Global comparable store sales were up 5%, driven by a 3% increase in the average ticket price. 

Starbucks recently announced the integration of Deep Brew into many of its locations, Deep Brew is an AI-powered platform that streamlines operational tasks allowing staff to focus on increasing customer relationships and enhancing customer service. 

In November, Starbucks opened its first-ever Starbucks Pickup store in New York City’s Penn Plaza. Designed for customers on-the-go, the location uses Mobile Order & Pay as the primary ordering and payment method. 

“Customer response is very favorable. It is showing just one more way that our brand is significant to our customer,” COO Roz Brewer said of the pickup-only store. “It’s those kinds of things combined with beverage innovation that give us the confidence that we’re listening to our customers and providing them access to our stores, access to our brand, the way they want to acquire their coffee and also listening to them in terms of how we should grow our beverage innovation.”

Starbucks reported revenues of $7.1 billion for Q1 fiscal year 2020 and has 31,795 locations in over 80 countries. 

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