The Canadian Press - ONLINE EDITION

As more people shop online, will fewer people stop in at Starbucks?

  • Print

NEW YORK, N.Y. - For marathon shoppers, stopping in at Starbucks is often a quick way to refuel. So where does that leave the cafes as more people decide to shop online from their couches?

The Seattle-based company apparently felt the impact this holiday season. On Thursday, Starbucks blamed its slower sales growth in the final three months of the year partly on the "seismic shift" toward online shopping that was underway.

"The impact to us is that there are fewer people out and about in the weeks leading up to Christmas," said Troy Alstead, the company's chief financial officer.

Starbucks says sales at established U.S. cafes rose 5 per cent in the period ending Dec. 29, compared with growth of 7 per cent a year ago. In the previous two quarters, it had climbed 8 per cent and 9 per cent.

Data from ShopperTrak, which tracks data at 40,000 stores in the U.S., backs up Starbucks' claim. The firm said there were fewer people in stores this holiday season, with the number of visits in November and December down by nearly 15 per cent to 17.6 billion.

Online sales during the holiday season rose 9.3 per cent, according to the National Retail Federation. That's much stronger than the 3.8 per cent rise for overall holiday retail sales, which include online sales.

Still, Starbucks executives were quick to downplay any potential repercussions. In a call with analysts, CEO Howard Schultz stressed that the company was uniquely positioned to handle — and even benefit from — the growing migration to the Web.

To start, Schultz noted that the "Starbucks experience" can't be replicated. He also pointed out that the company has aggressively expanded its loyalty program, which gets customers to visit more often. The company has also expanded its gift cards business, which helps bring in new customers.

Schultz even suggested all that time spent online will make Starbucks cafes even more important because they provide a "deep sense of community and human connection." As evidence, he pointed to the company's 4 per cent increase in customer visits during the period, despite the weakness many other retailers experienced.

Still, Starbucks did have to dangle some extra incentives to get people to come out; Schultz noted that the company was "a little bit more promotional" during December after realizing there weren't as many people milling about at malls and stores.

As a result, that average amount spent per visit likely went down a bit, he said.

Investors didn't seem too concerned. Starbucks' shares are up $2.42, more than 3 per cent, to $75.81. in midday trading.

___

Follow Candice Choi at www.twitter.com/candicechoi

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Jim Flaherty remembered at visitation as irreplaceable

View more like this

Photo Store Gallery

  • JOE.BRYKSA@FREEPRESS.MB.CA Local-(Standup photo)- Humming Around- A female ruby -throated hummingbird fly's through the bee bomb  flowers Friday at the Assiniboine Park English Garden- Nectar from flowers are their main source of food. Hummingbirds wings can beat as fast as 75x times second. Better get a glimpse of them soon the birds fly far south for the winter - from Mexico to South America- JOE BRYKSA/WINNIPEG FREE PRESS- Sept 10, 2009
  • A nesting goose sits on the roof of GoodLife Fitness at 143 Nature Way near Kenaston as the morning sun comes up Wednesday morning- See Bryksa’s Goose a Day Photo- Day 07- Web crop-May 09, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos

Poll

Now that the snow is mostly gone, what are your plans?

View Results

Ads by Google