Is Starbucks Corporation (NASDAQ:SBUX) Growth In Danger?

Posted by Steve Raasch September 30, 2013 0 Comment 3292 views


Starbucks Corporation (NASDAQ:SBUX), a global coffee chain operator with chains in 60 countries, is seeing growth coming from all corners and to make sure the growth remains intact the company is leaving no area untouched to make this happen. Starbucks Corporation (NASDAQ:SBUX) saw its stock price reaching $76.24 a share on few days ago, the highest in the company’s 42-year history.

Lately, the coffee retailer’s growing dependence on technologies is also seen as one of the major driving factors in order to boost customers’ traffic to their outlets. Starbucks Corporation (NASDAQ:SBUX)’ continuous focus on global expansion, improved and localized food offerings portfolio are some of the major growth enablers and revenue generators for the company.

Starbucks Corporation (NASDAQ:SBUX) wants to leave no stone unturned to improve its smartphone apps capabilities like adding gifting options among others to attract customers, and for this the company is tying-up with other brands for a better user experience. Starbucks Corporation (NASDAQ:SBUX) processes nearly four million transactions a week.

In addition, the company recently reported that its single cup category, during the past year, has shown excellent growth. The single cup category now accounts for more than 25% of Starbucks’ total coffee sales. The K-Cups are contributing larger revenue share to the company’s overall business. Starbucks sold one billion K-Cups during the third quarter.

Jayson Derrick in his article on Seeking Alpha wrote:

“Investors can expect the company to continue growing in most markets around the world, with a particular focus on large markets like China. The company recently opened its 1000th store in China during the June quarter, and aims to have 1,500 locations throughout China by 2015. Across the Asia-Pacific region, the company now has more than 4,000 stores, which reported 9% comparable-store growth, with traffic increasing by 8% year over year. In the coming quarters, the company will likely deploy its digital platforms such as mobile apps to international segments, which will further enhance customer loyalty.

In the third quarter, Starbucks shipped 1 billion K-Cups, having only expanded to this market 20 months prior. Management revealed during its recent conference call that its share of the single beverage category reached 14.9%. Sales grew 51% over the year compared to the overall industry that grew at 46%.

Despite shares trading near all time highs, current investors have plenty of reasons to hold off on selling, and new investors shouldn’t be afraid to buy. Investors can expect Starbucks to continue to build a foundation for future growth through food and beverage innovation, an upgraded food offering and continued success in international growth. The company’s industry leading innovative loyalty/mobile/digital assets will further reinforce customers’ positive views of the company.”

Starbucks Corporation (NASDAQ:SBUX) operates in Americas, Europe, Middle East and Africa, China/Asia Pacific (CAP), and Channel Development. In February 2013, Tata Coffee Ltd and Starbucks Corporation (NASDAQ:SBUX) started a roasting and packaging plant in Karnataka. Earlier this month, Starbucks promoted Troy Alstead, chief financial officer and chief administrative officer, to the post of chief financial officer and group president, of the company’s Global Business Services. He will continue to report to Starbucks’ Chairman and CEO Howard Schultz.


About Steve Raasch

Steve Raasch is a breaking news reporter for GDP insider. During his nearly two decades of editorial experience, Steve has covered a variety of topics including small business, health, personal finance, advertising, workplace issues and consumer behavior. Steve is very passionate about his work. Steve earned a master of arts degree in international relations from the Johns Hopkins University School of Advanced International Studies in Washington.

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