Starbucks Revamps Stores to Encourage Longer Visits and Boost Sales
Returning to Its Roots: Starbucks Aims to Bring Back Lounge-Like Atmosphere
Starbucks (SBUX) is shifting its store strategy by removing uncomfortable seating and unblocking power outlets to encourage customers to stay longer after ordering.
- This move harkens back to Starbucks’ earlier days when its stores served as community hubs, frequented by blue-collar workers and college students using free Wi-Fi and power for laptops.
- Encouraging longer visits is expected to drive additional food and drink purchases, enhancing overall sales.
Effort to Recapture Customers Amid Recent Earnings Misses
The strategy comes as Starbucks attempts to regain customer loyalty after a series of earnings misses—with the company failing to meet earnings per share targets in five of the last eight quarters and revenue estimates in six of eight.
Analysts Show Renewed Optimism on Starbucks Stock
Despite recent struggles, analysts are turning bullish on Starbucks shares:
- David Palmer (Evercore ISI) maintains a Buy rating, raising the price target from $95 to $105 (13.99% upside).
- Jeff Bernstein (Barclays) keeps a Buy rating, increasing his price target to $108 from $98 (17.25% upside).
- Upgraded SBUX to Buy with a $101 price target (9.65% upside).
Stock Performance
- Starbucks shares rose 0.35% in pre-market trading on Monday, continuing a 2.21% year-to-date rally.
- Over the past 12 months, SBUX stock has gained 19.42%.
