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Jan. 28, 2020, 1:44 p.m. EST

Starbucks earnings: Dunkin’ customers love for Starbucks pumpkin spice lattes expected to boost sales

Starbucks’ Chicago Roastery and pop-up parties were traffic drivers

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By Tonya Garcia, MarketWatch


Starbucks
The pumpkin spice latte at Starbucks is a traffic driver, data shows

Starbucks Corp. popular pumpkin spice latte isn’t just a hit with its own customers. It’s also a hit with Dunkin’ Brands Group Inc. customers.

Half of the visitors to a Dunkin’ /zigman2/quotes/200947441/composite DNKN -1.30% in the fourth-quarter of 2019 also went to a Starbucks /zigman2/quotes/207508890/composite SBUX -3.25% , according to data provided by advertising intelligence and measurement company Cuebiq. However only 16% of Starbucks visitors went to a Dunkin’ during the period.

“Thanks to the popularity of the pumpkin spice latte and the holiday cup, consumers overwhelmingly chose to visit Starbucks over Dunkin’,” the company said.


Starbucks
Starbucks’ 2019 holiday cups

Starbucks customers also showed their loyalty by coming back, with 55% of customers making two or more visits during the quarter, according to the data. Only 40% of Dunkin’ customers made a return trip during the quarter.

Pumpkin spice lattes (or PSLs, to fans) and festive cups weren’t the only traffic drivers during the quarter.

Between Dec. 27 and Dec. 31, Starbucks hosted 1,000 surprise parties where free coffee was handed out. Placer.ai, a retail intelligence company, found a 145% spike in traffic on Dec. 27 at a store in Minnesota where a party took place.

Read: Beyond Meat, Tyson’s Raised & Rooted and other plant-based foods are officially mainstream

And the coffee seller’s new Roastery in Chicago was a hot spot, with the number of visitors exceeding the baseline between Thanksgiving and New Year’s. Almost half of the customers to the Roastery traveled more than 30 miles to pay the 35,000-square-foot emporium a visit, Placer.ai said.

The Chicago Roastery opened for business on Nov. 15, and according to the Starbucks website, nearly 1,000 people showed up that morning.

“Our expectation is that improvements around labor and the beverage platform should continue to drive traffic in the Americas, through year-over-year traffic comparisons do become sequentially harder in the fiscal first quarter versus the prior quarter,” wrote RBC Capital Markets in a January restaurants report.

RBC rates Starbucks stock outperform with a $97 price target.

See: Constellation Brands to spend $40 million to launch Corona hard seltzer in the spring

Starbucks is scheduled to report fiscal first-quarter earnings on Tuesday after the closing bell. FactSet is guiding for U.S. same-store sales growth of 5%, and overall same-store sales growth of 4.4%.

Starbucks has beaten the overall same-store sales consensus the last two quarters.

/zigman2/quotes/200947441/composite
US : U.S.: Nasdaq
$ 75.09
-0.99 -1.30%
Volume: 818,141
Feb. 24, 2020 4:00p
P/E Ratio
25.96
Dividend Yield
2.14%
Market Cap
$6.30 billion
Rev. per Employee
$1.19M
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/zigman2/quotes/207508890/composite
US : U.S.: Nasdaq
$ 84.52
-2.84 -3.25%
Volume: 8.31M
Feb. 24, 2020 4:00p
P/E Ratio
27.62
Dividend Yield
1.94%
Market Cap
$102.53 billion
Rev. per Employee
$86,863
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