We listened into the Starbucks (SBUX) earnings call this week. The company is working to reverse current trends, trying to make their 16,000 world wide stores more customer and economic times oriented.
We were intrigued about a couple of things, that stood out to us:
- As noted in the earnings call, why is the average check per transaction still lower (5%), despite selling more food items per transaction? Is there some way to backfill?
- While SBUX value surveys rankings were reported to be strong, what about lapsed users?
- Does Starbucks have a “value menu” band somewhere in its future menu planning?
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And, what is the optimal store penetration rate, and how does that compare to the current number of stores? I know we’ve been told many times that Starbucks is not a restaurant, but being a status, lifestyle or a gathering place isn’t enough anymore. Depending on the research, more revolutionary menu changes might be needed.
Disclosure: Pacific management Consulting Group is a research oriented management consultancy that has no stock positions.