Reopenings, and more
Starbucks began reopening U.S. corporate stores in the second week of May, increasing from about 50 percent at April’s end to 91 percent as June arrived.
While these stores generally featured reduced hours and many were limited to on-the-go business, U.S. same-store sales improved (year-over-year) from negative 63 percent in April to negative 43 percent in May.
Comps fell roughly 32 percent in the final week of May, representing the sixth consecutive period of sequential improvement from a low of negative 65 percent in mid-April.
Starbucks rolled out entryway pick-up in May.
In-store transactions, which comprised about 40 percent of total sales mix before COVID-19, increased slightly following the gradual May reopening of cafes, the company said. In the last fiscal week of the month, more than 90 percent of domestic sales flowed through the drive-thru window and mobile order-and-pay. That figure was 97 percent in April’s final week and 60 percent or so pre-crisis.
Starbucks said its product mix held relatively steady since the start of the crisis. Average ticket, though, continues to trend above normal levels with more beverages and food items per transaction. The company expects that to normalize in time as consumers get back to routines and solo occasions rise.
Starbucks deployed loyalty offers and digital campaigns in May to reengage customers and drive business, which led to “a significant increase” in average weekly downloads and activations of Starbucks’ mobile app since the campaign ignited in early- to mid-May. Starbucks Rewards contribution to U.S. company-operated tender in the last week of May was 48 percent, up from 44 percent in Q2.
Same-store sales for corporate units open the last week of May dropped 28 percent versus the prior year. As of Wednesday, 95 percent of Starbucks’ domestic company venues were running at various levels of modified operations. The 5 percent that remain closed are primarily located in the New York City metro area.
Starbucks’ China recovery stretches back to late February. Comps improved to negative 21 percent in May, better than the 32 percent fall in April. They were down 14 percent in the final week of May compared to prior year.
Today, 99 percent of Starbucks’ China restaurant are open, of which about 90 percent have returned to pre-pandemic operating hours. More than 70 percent of the open stores have full café seating available.
As that’s happened, sales mix from mobile orders trended down correspondingly, from a high of 80 percent at the end of February to about 22 percent before June.
Starbucks has begun growing in China, too. The chain opened 57 net new stores across April and May, including eight Starbucks Now models that focus on mobile ordering for pickup and delivery. Starbucks has more than 4,400 China units currently, with the addition of 281 new restaurants through the end of May in fiscal 2020. It’s on track to add at least 500 net new stores this fiscal year.