GlobalData Retail expresses Starbucks Delivers concerns

GlobalData Retail expresses Starbucks Delivers concerns

Earlier this week, we reported that Starbucks was expanding its Starbucks Delivers pilot, powered by Uber Eats, to an additional six cities in the US and also London.

It’s one of the ways in which the company hopes to expand its audience, but it could backfire, according to Neil Saunders, Managing Director of GlobalData Retail. “This scheme allows customers to order via the app and have products delivered to their home or workplace. While the trial has reportedly been successful, we have mixed feelings about its further roll-out,” he says.

“If the scheme is successful, one of our major concerns is how some stores will cope with the additional orders. Wait times in some Starbucks are already poor and this service may only exacerbate a major pain point for customers.”

China, meanwhile, remains a clear area of opportunity. However, rapid store expansion has created some cannibalisation, and competition from players like Luckin Coffee is now growing rapidly. “This will inevitably weaken both the return on investment and productivity growth from Chinese stores. Europe also remains challenging, largely thanks to negative economic headwinds and heavy competition. This suggests a continued reliance on the US as the primary engine of profitable growth,” says Saunders.

Starbucks did not respond to our request for comment.

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