We have known for some time that coffee giant Starbucks (SBUX) has been eager to get people back in its cafe locations, to the point where it is redesigning and refurnishing the stores in a bid to get people to sit and enjoy the experience. With that in mind, it may not be much of a surprise that Starbucks wants to phase out the pickup-only stores over what reports call a lack of “warmth.” The move struck a chord with investors, who sent shares surging nearly 2% in Wednesday afternoon’s trading.
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The mobile order and pickup-only stores were once regarded as a vital means to take weight off the baristas’ collective shoulders. Mobile orders once flooded Starbucks to the point that someone at the front of the line in the store might actually be stuck behind several orders received online. Starbucks responded with stores that just made drinks and handed them out, about 90 of them total in the United States alone.
With mobile ordering service accounting for about one in three transactions Starbucks has, accommodating them accordingly does not seem like a bad idea. But Starbucks plans to add seating to at least some of these locations, yet still deliver drinks in four minutes or less. This might seem like a bridge too far, but Starbucks plans to go on something of a hiring binge, pulling in more baristas to allow for more human contact while also making drinks with the necessary speed.
Heavy on the Protein
While there were efforts to simplify the Starbucks menu to help speed up the flow of beverages, it seems Starbucks is looking to complicate matters once more. Several new beverages will be coming out, along with some “improved baked goods,” reports note.
One new beverage coming up is a “cold foam protein drink,” along with beverages that focus on coconut water as a key ingredient. There are also plans to improve the quality of baked goods, and hopefully, improve the quantity of them available as well. Earlier reports noted that some locations would run out of food periodically, a move sure to send disappointed customers heading for the door.
Is Starbucks Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 13 Buys, seven Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 19.26% rally in its share price over the past year, the average SBUX price target of $100 per share implies 6.38% upside potential.
