Starbucks to extend loyalty program

Starbucks will extend use of its loyalty card to Teavana tea shops, and customers will soon earn reward points when buying the brand’s packaged coffee in grocery stores, the company said during its annual shareholder meeting in Seattle.

The My Starbucks Rewards loyalty card accounts for about $3 billion in sales per year, and more than 30 percent of transactions are pre-paid through the card in the U.S., according to Adam Brotman, Starbucks’ chief digital officer.

The loyalty program has more than 6 million members, and the company expects to reach 9 million members by the end of fiscal 2013. About 80,000 new members join each week, Brotman noted.

The next step is to integrate the loyalty program with brands Starbucks recently brought into the fold, including the 300-unit Teavana retail chain, which the company acquired last year. In April, customers at Teavana will be able to use their Starbucks loyalty cards, or the mobile app, to pay and earn reward points.

My Starbucks Rewards cards can be used at the company’s four Evolution Fresh juice bars, as well as the one Tazo Tea store in Seattle.

In addition, in what is believed to be the first cross-channel loyalty program, customers will be able to earn loyalty points when they buy Starbucks packaged coffee in grocery and other retail stores outside the coffeehouse locations, starting in May.

The program will include specially-marked packaged coffees — both whole bean and ground — that will feature a code that can be redeemed online at the company’s website. Guests will be able to earn “stars” for their My Starbucks Reward accounts, enabling them to receive free food or beverages at Starbucks stores, along with other special offers.

The company expects to extend the rewards program to other Starbucks-branded products sold through grocery channels in the fall.

Company officials said they are exploring other options for expanding the loyalty program’s reach, but they did not reveal whether the recently acquired La Boulange bakery chain in San Francisco would also be included.

Brotman said Starbucks’ mobile payment business is also growing, with more than 10 million users in the U.S. generating more than 3 million transactions per week on their smartphones.

During the shareholder meeting Starbucks also celebrated its performance in 2012. The company achieved revenue of $13.3 billion during the year, marking a 14-percent increase over the prior year.

With more than 18,000 locations in 62 countries, Starbucks has reported more than 5-percent growth in same-store sales for 11 consecutive quarters, said Howard Schultz, Starbucks’ chair, president and chief executive.

The company is accelerating unit growth, particularly in China, which it expects to be the coffeehouse chain’s No. 2 market worldwide by 2014, and one that will eventually eclipse the U.S., Schultz said.

In the Americas region, where there are 12,983 Starbucks locations across 13 countries, the company is planning to open 3,000 new units over the next five years, including 1,500 units in the U.S.

Contact Lisa Jennings at [email protected].
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