We’ve dedicated a fair amount of time in the past lauding Starbucks and its ability to own the calendar, test new concepts and more recently, to weather the COVID storm.
And looking back on Q3 and ahead to Q4, the potential exists for an exceptional end to 2021.
Q3 Performance
The wider recovery for brick-and-mortar retail and the Back-to-School retail season gave Starbucks a significant push this summer. Looking at monthly visits compared to 2019, July and August saw visits up 4.1% and 1.8%, respectively before declines returned, with September visits declining 3.4%. The surges in June and July were likely caused by the combination of the retail reopening and the Back-to-School season driving retail visits, along with a unique summer where international travel was limited, leading to more domestic visits.
Critically, though, this pattern of summer rise and early fall decline was also seen across the retail and dining sectors, with Starbucks actually showing real strength relative to these wider categories. While COVID clearly played a role in the September regression, other factors were likely involved as well, including the continued shifts in work and school routines, lingering impacts on city traffic, and even the heights hit during the summer.
But looking at weekly visits compared to 2019 reinforces the overall strength of the recovery Starbucks has seen. Weekly visits saw consistent growth throughout July and most of August before gaps returned in late August and early September. And even the declines seen in September are far better than those experienced in the spring, even though September’s declines coincided with the surge of the delta variant.
The Coming Holiday Surge?
There is also reason to view the current strength as a foundation for even greater Q4 heights. Looking at Starbucks daily visits since the start of 2018 compared to the baseline for the period from January 1st, 2018 through September 2021 shows just how significant a role the holiday season can play.
Beyond the fact that the Starbucks product offering is a more natural fit in the winter, the brand consistently sees major visits spikes during these periods as a result of effective promotions like Red Cup Day and the complementary nature of its offering with the holiday shopping season. Beyond the aforementioned giveaway, which consistently drives an annual visit peak for daily traffic, Black Friday and pre-Christmas shopping all bring boosts to Starbucks locations.
The idea is simple. A day-long shopping trip can be exhausting and Starbucks can provide a welcome pick me up, especially considering how many of its locations are in malls and major shopping areas. This could be especially valuable this year, as the lack of a true shopping season could drive pent-up demand, and the more spread out nature of deals could extend that opportunity over a longer period of time. This could be even more significant if COVID cases continue to decline into the start of the shopping period. Considering the strength seen in the 2019 holiday shopping season. If Starbucks visit numbers come close to those standards, the end of 2021 could serve as a major milestone in the brands offline recovery.
Will Starbucks reach even greater heights in 2021?
Visit Placer.ai to find out.
