Starbucks sales slump amid Covid-19

Starbucks has announced that global comparable store sales plummeted 40% in the quarter ended 28 June, driven by a 51% decrease in comparable transactions, though partially offset by a 23% increase in the average ticket.

Consolidated net revenues slumped by 38% to $4.2bn (£3.24bn) against the prior year, primarily due to lost sales related to the pandemic and estate-wide closures.  

The coffee chain giant said that lost sales of approximately $3.1bn (£2.4bn) relative to its expectations before the outbreak included the effects of temporary store closures, modified operations, reduced hours and reduced customer traffic.

The group did, however, open 130 net new stores in its third quarter, yielding 5% year-over-year unit growth. It ended the period with 32,180 stores globally, of which 51% and 49% were company-operated and licensed, respectively.

As of today (29 July), 97% of its global company-operated store portfolio is operating, led by 96% in the U.S. and 99% in China. Approximately 87% of its global licensed store portfolio is also open, with remaining temporary closures predominantly in airport, college and university locations.

Kevin Johnson, president and CEO, said: “Since the beginning of the Covid-19 outbreak in January, we have taken a principled approach to navigate the crisis, true to our mission and values. 

“Starbucks partners have risen to the occasion, and our near-term focus is to recover sales safely and responsibly by offering our customers the comfort and care that differentiate the Starbucks experience.” 

He added: “We are pleased to share that the vast majority of Starbucks stores around the world have reopened and our global business is steadily recovering, demonstrating the relevance of the Starbucks brand and the trust we have built with our customers. 

“As we continue to drive the recovery, we are also building resilience for the future by accelerating the transformation of our business in ways that will elevate the customer and partner experience and drive long-term growth. We firmly believe that we are well positioned to regain the positive business momentum we had before the pandemic began and look forward to reigniting our ‘Growth at Scale’ agenda.”