Starbucks is expanding their delivery service in both the United States and China, so it can boost the growth in those two markets.
The Seattle-based brand has stated that they are going to partner with Uber Eats to provide delivery from 2,000 American stores by the summer of 2019. Starbucks has yet to say which stores are going to provide the service.
In China, Starbucks is already partnered with the delivery service Ele.me. They started their partnership approximately three months ago, and currently deliver from 150 stores. However, by the end of 2018, that number is rising to 2,000 stores in 30 different Chinese cities.
Starbucks made the announcement on Thursday, December 13th, at a New York investor presentation. The major coffee chain has said that they have worked hard to simplify their business over the recent years by closing their Teavana stores and selling European stores to franchisees. According to the company, their reason for doing that is so they can focus primarily on the United States and the Chinese market.
The United States is Starbuck’s largest market, though the brand says that they see tremendous opportunities to open approximately 550 new stores over the next few years. They also advised investors that they are planning to close 150 stores that are underperforming in 2019. Starbucks is also looking into opening up 600 stores annually through 2022, which brings the total to approximately 6,000 stores in China.
Investors questioned whether Starbucks is going to earn fewer profits because of Uber Eats charges. The group president of America’s Starbucks, Roz Brewer, stated that the company is still researching that. They have been running a pilot program with 200 stores in Miami, and have found that the delivery works best in urban areas where the delivery fees are much lower, due to high demand.
Kevin Johnson, the CEO, also commented that Starbucks customers are spending upwards of three times more on delivery orders, which makes the Uber Eats partnership much more appealing.