Starbucks Corporation (SBUX) reportedly sold nearly 46 million gift cards this holiday season which we believe will boost the top line in first-quarter fiscal 2015, to be reported later this month.
Per media reports, one out of every seven American received a Starbucks gift card this season, up from one in eight in 2013.
Under the gift card program, Starbucks launched a uniquely designed Starbucks Card collection in November including more than 100 gift card designs. Moreover, the coffee giant offered a limited edition silver premium gift card made from sterling silver with the Starbucks logo engraved in it. In addition to the gift card program, Starbucks expected its strong holiday line-up, including the new Chestnut Praline Latte and Starbucks for Life contest, to improve traffic trends at its stores during the shopping season.
Starbucks’ loyalty cards are gaining popularity and currently, nearly one-third of all the U.S. and Canada transactions are made through Starbucks cards. At the end of fiscal 2014, the company had 8 million active members in the U.S. under My Starbucks Rewards (MSR) program, representing 23% increase from the last year.
Retail companies are witnessing a shift among consumers from bricks-and-mortar stores to online shopping. Therefore, CEO Schultz is focusing more on leveraging the mobile and digital assets in addition to loyalty and e-Commerce platforms to garner more revenues.
Moreover, Starbucks is undoubtedly the number one mobile payment app in the U.S. The company launched its “Mobile Order & Pay” initiative in Portland, OR in December and plans to launch it nationwide by 2015-end. This initiative will allow customers to order before arriving at a Starbucks cafe. Starbucks also expects to introduce food and beverage delivery through users’ mobile devices in select urban markets in the second half of 2015. These new mobile initiatives are expected to quicken service, increase convenience and improve customer loyalty, thereby driving transactions and spur traffic.
Stocks to Consider
Starbucks carries a Zacks Rank #3 (Hold). Better-ranked restaurateurs include Red Robin Gourmet Burgers Inc. (RRGB), Domino's Pizza, Inc. (DPZ) and Ruby Tuesday, Inc. (RT). While Red Robin sports a Zacks Rank #1 (Strong Buy), Domino's Pizza and Ruby Tuesday have a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment