Some Questions for Starbucks

| About: Starbucks Corporation (SBUX)

We listened into the Starbucks (NASDAQ: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.