Starbucks’ Active U.S. Loyalty Members Grow 48%
Starbucks’ active loyalty members have helped the coffee retailer’s pandemic recovery, but CEO and president Kevin Johnson said the acceleration in non-rewards customers is really further evidence of “the great human reconnection.”
Members of Starbucks Rewards in the U.S. who have been active for 90 days increased to 24.2 million, up 48% year-over-year. The retailer added more than 1 million new active Starbucks Rewards members in Q3 2021.
“With over 24 million active members now representing 51% of all spend in our U.S. stores and up 8 percentage points over pre-pandemic levels, our ability to engage has never been higher,” Johnson said on the earnings call.
A little over three quarters ago, Starbucks launched The Stars for Everyone program, which makes it easier for people to join the Starbucks Rewards program.
“It enables customers to make purchases by adding alternative payment options in addition to utilizing store value,” said John Culver, group president, International Channel Development and Global Coffee, Tea & Cocoa. “And really what we’re seeing there is that it helped to drive the 49% increase that we are seeing year-over-year in membership across broadly the Starbucks Reward program. To put that into context, we have added nearly 5 million, 90-day active members since the beginning of this fiscal year and what this has done is, driven a meaningful increase in the conversion rate for those who joined the Starbucks Rewards program.”
Johnson noted, that while it is very clear that the Rewards program accelerated Starbucks’ recovery in a meaningful way, what really stands out in Q3 and is adding to the retailer’s confidence, is the acceleration it saw in non-rewards customers. While rewards spend grew at a rapid mid-teens rate quarter-over-quarter, for the first time in 11 quarters, non-rewards spend growth outpaced Starbucks Rewards spend.
“This is further evidence of the great human reconnection,” said Johnson. “The rapid reengagement of non-rewards customers not only propelled our record results, but also underscores the strength of the brand and the growth potential ahead.”
U.S. comparable store sales increased 83% in the quarter, driven by an 80% increase in comparable transactions and a 1% increase in average ticket. In the past twelve months, the retailer has opened 554 new stores combined with in-store seating and drive through service. Portfolio repositioning and new store formats have increased drive-thru performance to 75% of total U.S. sales.
“We continue to see strong sales recovery in the rural and suburban areas of the business, and in particular where drive-thrus are most common,” said Culver. “That is helping us to drive larger orders and a higher ticket. We saw record ticket in the quarter from an overall U.S. perspective.”
“As the Great Human Reconnection continues to unfold, our partners are rising to the occasion, ready to meet our customers wherever they need us to be – with the right store, in the right place, at the right time,” Johnson said in a press release. “Given the strength of our diverse portfolio and the elevated Starbucks Experience, as evidenced in our Q3 record results, we are raising our full-year financial outlook and are confident in our ability to continue to execute our ‘Growth at Scale’ agenda to unlock the full potential of the Starbucks brand."