The Starbucks Corporation made several of their company's strategic plans public at a presentation last week and among the disclosures is that the coffee giant is set to offer more food choices, new products like juice and sodas and more technology in order to maintain its strong pace of growth in 2014.
Food sales provide some of the biggest potential upside for the Seattle-based coffee retailer. The company rolled out only half of the number of planned bakery products under its acquired La Boulange brand, with some food items appearing for the first time last year.
“Food is probably the biggest near-term opportunity that we can see,” Chief Financial Officer Scott Maw told investors at a conference in New York. “We continue to say: ‘It’s early days.’”
About 30 million U.S. Starbucks sales transactions each week don’t include food at all, according to the company. That’s even after the food as a share of sales doubled in the past decade. Starbucks has yet to push its food offerings in a big way internationally, and it is first experimenting it in the U.S.
Both food and new drinks have usually added one to two points of comparable sales growth each quarter, for the past several quarters, company executives told investors. They expect that steady but small contribution to continue.
In the summer of 2014, the U.S. Sun Belt states, which include Texas, Alabama and Florida, among others, will see new Starbucks’ handcrafted sodas. That will hit a third of Starbucks’ U.S. stores and has already been tested in Atlanta, Austin, Texas, and Japan, before a planned national rollout in 2015.
Fresh products have helped Starbucks drive sales growth even as consumers in developed markets suffered from stagnant wages and the financial crisis. Starbucks is among U.S. companies that have bested older household names, such as McDonald’s Corporation or Wal-Mart Stores, Inc., on pure sales growth.
Starbucks also calls itself the largest mobile payments retailer in the U.S. It plans to allow customers to order in advance before even entering its stores, so that rushed coffee-drinkers can save time. An express system for people who need to skip queues may also be in the works. Advance-ordering technology will launch in a major market this year, Chief Operating Officer Troy Alstead said.
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