Starbucks targets drive thrus for U.S. growth

More than half of the 1,500 new coffeehouse locations Starbucks Corp. plans to open in the United States over the next five years will be drive-thrus, company officials said Thursday in a first-quarter earnings call.

The Seattle-based company also reported a 13-percent increase in profit for the quarter that was boosted by the strongest holiday season in its 42-year history, with an estimated 1-in-10 U.S. adults receiving a Starbucks gift card.

Starbucks chair, president and chief executive Howard Schultz said the record results were delivered despite a backdrop of lackluster consumer confidence and a weak global economy, “demonstrating the strength, unique resilience and increasing relevance of our global business and brand.”

Drive thrus drive profit, growth

Starbucks plans to add 1,300 new units globally this year, including about 600 in the Americas, mostly in the United States, about half of which will be licensed. Another 600 locations are scheduled to open in the China/Asia Pacific region, about half of which will be in China.

U.S. growth will focus on drive-thru locations, which the company said has become a highly profitable format. About 60 percent of the 1,500 U.S. units planned in the next five years will have a drive thru.

“Drive thrus create incremental revenues and profits compared to traditional stores and represent a fast-growing and highly profitable format for Starbucks, comprising just over one-third of our U.S. company-operated stores but contributing nearly 45 percent of our U.S. retail profit,” Schultz said.

“We are investing in this high-margin store format with innovations that will elevate the customer experience of our brand by enhancing drive-thru efficiency and consistency of service,” he added.

Starbucks plans to remodel about 1,400 U.S. units this year, and about 500 of those locations will receive a major overhaul.