Coffee giant Starbucks (SBUX) is focusing on one big plan right now, known in some circles as “Back to Starbucks.” This plan focuses on getting customers in stores, and convincing them to stay. Several features have been improved or added in aid of this, and more are on the way, as furniture gets redone and other features make comebacks as well. And early word suggests the idea may be working. Investors are cautiously optimistic, as shares gained fractionally in Tuesday afternoon’s trading.
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One of the biggest returns is the condiment station. A self-serve operation where customers can add things like milk and spices and the like to drinks, it is serving as a way to give customers a point to “…linger, adjust their drinks, and strike up short conversations.” Cup doodling also came back, though this proved to be a for-better-or-worse situation, occasionally worse.
And the early results suggest the concept is working. Starbucks recently posted its first comparable-store results that turned positive in seven quarters. Not by much, though; global comparable store sales were up 1%, with North American stores flat and international stores up 3%. China stores were up 2%, though the impact of Chinese stores will likely be limited with Starbucks recently selling an equity stake to Boyu Capital.
The Growing Concern over Waste
Starbucks baristas are having a bit of a long dark night of the soul, meanwhile, over growing food waste in Starbucks stores. While Starbucks has pared back its food menu substantially—around a third by some reports—there is still some waste going on. One barista noted being “…so shocked by the sheer amount of stuff we threw away.”
In this case, though, food was not being wasted so much as everything it was served in. Starbucks has policies about donating edible unsold food. But the policies on things like panini bags, pastry bags, and various cups are less clear. Starbucks reps noted there are no protocols on throwing out core packaging items, but recycling or composting is suggested instead.
Is Starbucks Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 12 Buys, seven Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 3.34% loss in its share price over the past year, the average SBUX price target of $96.12 per share implies 6.8% upside potential.
