With traffic remaining virtually flat at Starbucks, the coffee giant is looking for ways to entice more customers into its shops while also counting on its current customer base to spend more money with every order.
The company has opened its Tryer Innovation Center in Seattle to “build a pipeline of future ideas in the areas of store design, beverage platforms and customer experience,” Starbucks CEO and President Kevin Johnson said in a call with analysts Thursday.
Starbucks same-store sales grew 4% for the quarter ended March 31, fueled almost entirely by a 4% increase in average ticket. Transactions remain flat after falling in the two previous quarters.
The company said that its new Cloud Macchiato drink was the “second most viral Starbucks campaign ever” and that its sales had exceeded expectations while also driving incremental visits. Nitro cold brew, currently in about half of all Starbucks units, is slated to be available at all stores by the end of the fiscal year, Johnson said.
He also hinted at a “strong beverage innovation plan for the summer.”
Starbucks’ net revenues grew 5% year over year to $6.3 billion. And participation in the company’s app-based rewards program continues to grow, with 16.8 million active users, an increase of 13% year over year. Those rewards members accounted for 41% of all U.S. sales in the second quarter, the company said.
The company recently rolled out a revamped rewards program that uses a multitier redemption system. Also new to the program is a functionality that allows Starbucks workers to see how many reward points, or stars, a customer has earned.
“That is keeping any of the dissension down just because our partners are now able to explain the program right from the POS system and tell them what’s available,” Roz Brewer, chief operating officer and president of Starbucks’ Americas Group, told analysts.
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