Starbucks Ramps Up U.S. Delivery as the Service Explodes in China

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Starbucks Ramps Up U.S. Delivery as the Service Explodes in China

By Jamie Grill-Goodman - 07/30/2019

Starbucks recently announced plans to make Starbucks Delivers available throughout the U.S. in early 2020 through an agreement with Uber Eats.

The moves comes as the retailer’s China Digital partnership with Ali Baba has enabled it to expand Starbucks Delivers to approximately 2,900 stores across nearly 80 cities in China by the end of its third quarter 2019. Starbucks is on track to have the delivery service exceed 3,000 stores or roughly 75% of China’s total store base by the end of this fiscal year.

“We continue to see strong performance in key cities, including a meaningful, incremental transaction lift, increased ticket and strong operational performance,” Starbucks president and CEO Kevin Johnson said during the company’s recent earnings call.

By partnering with Uber Eats, Starbucks is leveraging the expertise of the largest global delivery service outside of China, while extending the potential customer base beyond those who currently include Starbucks as part of their routines. Through the agreement, the companies will collaborate on innovation and technology integration.

“We are pleased to see that Starbucks partners are effectively enabling delivery in our stores alongside retail operations, improving the customer experience,” Kevin Johnson said. “It is still early days for food and beverage delivery in the U.S. and …we are not yet seeing Starbucks delivers meaningfully contribute to our U.S. business results. We believe that delivery is an important long term growth opportunity given customers increasing demand for convenience.”

In the U.S. Starbucks has already expanded Starbucks Delivers in partnership with Uber Eats, to over 2700 stores across 11 markets.

“We continue to learn as we expand and drive customer awareness of this new channel and are seeing higher ticket compared to in-store transactions, as well as sales incrementally,” Johnson noted.

Starbucks Delivers powered by Uber Eats began rolling out in fall 2018 through a pilot in Miami and is currently available in 11 U.S. markets. The pilot then expanded to San Francisco, CA, with the company set to bring the service to nearly one-quarter of U.S. company-operated stores by April.

“We are driven to create new and unique digital experiences that are meaningful, valuable and convenient for our customers,” said Roz Brewer, group president and chief operating officer for Starbucks. “Partnering with Uber Eats helps us take another step towards bringing Starbucks to customers wherever they are.”

"As we expand, we will continue to refine the program and ensure a quality customer experience as demand for delivery builds," said Johnson.