Starbucks Will Soon Deliver Your Coffee Via Uber Eats, And That Will Give Its Growth A Real Jolt

Starbucks’ new New York Reserve Roastery. (Photographer: Mark Abramson/Bloomberg)© 2018 Bloomberg Finance LP

Starbucks SBUX -2.38%, facing slowing U.S. sales growth, is joining McDonald’s and other foodservice chains on the delivery bandwagon in a big way: By early next year, nearly a quarter of its more than 8,000 company-operated U.S. stores will offer Starbucks Delivers via Uber Eats.

The Seattle giant’s nationwide U.S. delivery debut is coming after tests with Uber Eats in Miami and Tokyo and after learning from its key growth market, China, where Starbucks has expanded delivery to 2,000 stores across 30 cities in just three months via a partnership with an Alibaba delivery unit, Starbucks said Thursday. (Starbucks previously conducted a delivery pilot test in its Seattle home market with Postmates in 2015 that ended in 2016, a Starbucks spokeswoman said.)

Starbucks also said it plans to roll out its Nitro Cold Brew to all U.S. company-operated stores by the end of fiscal 2019 to meet growing consumer demand.

In addition, to show it still has the upscale flair to compete with the growing crop of specialty coffee shops like Blue Bottle Coffee, the company on Friday opened a 23,000-square-foot Starbucks Reserve Roastery in New York’s posh Meatpacking district, its second such U.S. location (after Seattle) and fourth globally. As part of the “immersive coffee experience,” the megastore roasts coffee beans on site and has a bakery as well as a bar that serves alcohol.

But among Starbucks’ various growth initiatives to combat a lower long-term profit outlook that sent its stock lower on Friday, delivery may well give its sales the biggest kick. Why? In the past two years, U.S. mobile orders for delivery and pay at Starbucks’ U.S. company-owned stores have more than doubled to 12% of those stores’ total sales, from 5%. That outpaced the growth in drive-through sales, which increased to 37% of the total, from 34%, during the same period, Starbucks said Thursday. Meanwhile, orders made at brick-and-mortar cafés declined to 51% of the business, from 61%.

With time-starved consumers increasingly demanding convenience, Starbucks is riding the delivery wave, a big bright spot for the entire food and beverage service industry. Companies from McDonald’s to the more upscale Cheesecake Factory have partnered with delivery apps including Uber Eats and DoorDash to service delivery orders. McDonald’s CEO Steve Easterbrook, for instance, said in October that delivery is “becoming an increasingly meaningful contributor” to the fast food giant’s comparable sales growth.


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