For some time now, coffee giant Starbucks (SBUX) has been trying to make its locations more inviting, and encourage customers to stick around for a while, likely hoping to sell more food and drink to said customers. While in the United States, that means nicer chairs and modified lighting, in China, that means a little something different: study rooms. Investors were a little less than pleased, though, and shares slipped modestly in Wednesday afternoon’s trading.
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The practice is not necessarily new, though it will be to some locations. The rooms have already been launched in Guangdong Province, and reports suggest it could step things up to more locations later. But for now, the study rooms are available to anyone who wants to use them, and there is not even a requirement for purchase.
Chinese Starbucks locations are also shaking up their food and drink menus, making locations pet-friendly, and even bringing in student artwork for some branches that are close to universities in a bid to make their locations more welcoming. The interesting part is, here, that Chinese unemployed often used Starbucks as a kind of surrogate office, hiding their unemployment from families by going out for the day and hiding in a Starbucks branch. The free study rooms should make that practice even easier.
Maybe This is Why You’re Out of Food
Just days ago, we found out that Starbucks locations often ran out of food unexpectedly. A recently-revealed practice may suggest a reason why: doubled pastries. Apparently, a Starbucks employee noted on Reddit, Starbucks employees are specifically told to “double up on unwrapped pastries” when there are corporate visits planned.
The display pastries are not sold, but instead sit out, and are later thrown away. This is apparently the practice at multiple Starbucks locations, as confirmed by several employees, according to reports. So when Starbucks customers go to buy food, but cannot, a potential reason why may be because the food they would have bought is instead being used to drive food sales as a display item. That might be one of the best ironic twists around.
Is Starbucks Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 13 Buys, nine Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 29.81% rally in its share price over the past year, the average SBUX price target of $96.24 per share implies 0.28% upside potential.
