The Economy

Starbucks Changing Format of Business District Stores

CEO Kevin Johnson says store traffic is down in central business districts but up in the suburbs.
Vincent RyanOctober 30, 2020

Starbucks reported fourth-quarter earnings per share of 51 cents Thursday, beating analyst expectations of 31 cents, and fourth-quarter sales of $6.2 billion that beat the Street estimate of $6.04 billion.

Starbucks CEO Kevin Johnson appeared on CNBC’s “Squawk on the Street” and discussed store traffic, growth, and Chinese consumers.

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Johnson On Starbucks Traffic

“We were at negative 65% same-store comparable sales in April; four months later, we’re at negative 4%,” the Starbucks CEO said. Store traffic is down in central business districts and up in the suburbs, he said.

Starbucks is repositioning central business district stores to a pickup format, Johnson said, adding that this will take place over the next 12 months.

Starbucks has opened over 60% of its stores for limited seating, and customers are coming back, the CEO said.

On Starbucks Growth

Starbucks’ growth is primarily driven by group orders; is still driven by beverages; and food attaches are at an all-time high, Johnson told CNBC.

On China

Starbucks is bullish on its business in China, Johnson said. Stores have full seating, and there are very few COVID-19 cases in the country, he said.

“The Chinese consumer is the most digitally oriented consumer in the world.”

Starbucks established partnerships with WeChat, Alibaba, and Tencent over the last quarter, the CEO said.

This story originally appeared on Benzinga.

© 2020 Benzinga does not provide investment advice. All rights reserved.

(Photo by Noam Galai/Getty Images)