Starbucks' strategy of operational streamlining, disciplined expansion, delivery services and cold brew appears to be paying off in the US and China
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Starbucks CEO, Kevin Johnson, said he was "very pleased" with the coffee chains full-year results
In its fiscal 2019 results, Starbucks announced consolidated global revenues grew 7% to $26.5bn, with like-for-like sales rising 5% across its international portfolio.
Globally, the US coffee chain opened 630 net new stores in the fourth quarter, yielding 31,256 new locations – growth of 4.1% in the six months since opening its landmark
30,000th store in March 2019. The results mark a positive turnaround for Starbucks, which appeared to be
struggling in mid-2018 with flattening global sales.
Operational streamlining, such as the licensing of its CPG foodservice businesses to Nestlé as part of the
$7.1bn ‘Global Coffee Alliance’, the conversion of some retail outlets to licensed stores and an EMEA corporate restructure, were among the measures credited with Starbucks' buoyant full-year results.
“I’m very pleased with our strong finish to fiscal 2019, as we sustained positive momentum across each of our business segments,” Johnson said. “We are making meaningful progress against our strategic priorities while streamlining the company, bringing more focus and discipline to everything we do,” he added.
The US and China remain Starbucks core growth markets, where the coffee chain has introduced significant digital integration, such as delivery services and its Starbucks Rewards loyalty app. Like-for-like sales in Starbucks’ flagship US market rose 6% as the chain rolled out nitro cold brew nationwide and expanded its
delivery partnership with UberEats. Allegra research shows Starbucks remains a key driver of US coffee shop segment growth, retaining a 40% share of the
$47.5bn market.
In China, Starbucks has significantly ramped upped its digital offerings, including a
delivery partnership with e-commerce platform, Alibaba, to counter the growing influence growing market competition and domestic chains, such as
Luckin Coffee. The opportune east-Asian market also led Starbucks’ store growth, recording a 17% net store increase alongside 5% like-for-like sales growth.