Starbucks’ U.S. sales fully recovered in the first three months of the year, the company said on Tuesday, as customers visited less often but ordered a lot more once they did.
Same-store sales rose 9% in the U.S. in the company’s fiscal second quarter ended March 28 even though transactions at the chain declined 10%. Yet average check rose 21% as customers ordered more food items and beverages with oat milk.
Same-store sales rose nearly 6% over 2019 levels, meaning the company generated higher sales than it did during the same period a year ago. Company executives on Tuesday said that same-store sales improved from the previous quarter across all dayparts and in all types of stores.
“We have positioned Starbucks for the inevitable great human connection that we are seeing unfolding in the U.S. and will propagate in every market around the world,” CEO Kevin Johnson said in a statement, noting that “Starbucks was built for this moment.”
The Seattle-based coffee giant has also enjoyed strong growth internationally, where same-store sales rose 35%. That included 91% same-store sales in China, where the chain struggled with closed shops for much of the same period a year ago. China is Starbucks’ second-largest market after the U.S.
Starbucks operates more than 15,000 locations in the U.S. and nearly 33,000 globally.
While transactions declined in the first three months of the year, they improved from a 21% decline in the previous quarter. Yet the company kept the abnormally high average check during the quarter.
Executives said on Tuesday that customers are ordering more items like its Impossible Breakfast Sandwich. Customers ordered more food than they ever have at Starbucks. The chain’s customers also had an “overwhelmingly positive response to oat milk,” Johnson said, after the company’s introduction of the plant-based milk.
Starbucks doesn’t expect the higher average check to continue. Rachel Ruggeri, the company’s chief financial officer, said that average check is expected to “moderate” as customers return to their normal level of frequency amid the recovery. The company expects visit frequency to normalize in the second half of the year.
The company did get strong results from its drive-thru locations in suburban and rural markets, executives said, which more than offset continued weakness in stores in business centers and urban markets.
Starbucks early in the pandemic decided to strategically close hundreds of restaurants, with plans to develop different store formats, including pickup stores and those with drive-thrus. The company said it is 70% finished with its store closure strategy.
The company also began working to improve speed in the drive-thru, adding more efficient warming ovens, hand-held ordering devices and more efficient espresso machines. Drive-thru represented more than 50% in net sales in the quarter—up more than 10% from pre-pandemic levels.
The company also got more orders from its mobile app and loyalty customers. The number of Starbucks Rewards members in the U.S. rose 18% year-over-year in the quarter and the chain now has almost 23 million members in the program. The program now represents more than half of sales at the chain’s company-operated locations.
Mobile orders increased, too. The company said 26% of transactions at company locations came over app, up from 18% a year ago.
UPDATE: This story has been updated to include more details from Starbucks earnings call Tuesday.
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.