Starbucks To Step-up Non-Coffee Sales
Starbucks is zeroing in on merchandise sales for the upcoming holiday season. While sales of non-beverage items has remained relatively low in recent years, the company is bulking up its sales team to offer more variety in their sales than frapachinos and lattes. In 1998 the company”s merchandise sales were up to 8 percent but in recent years it has remained at about half that. This Christmas, Starbucks is looking at offering things like snow-globes, Christmas tree ornaments, and dishes that read “Cookies for Santa.” They may also introduce “Bearista Bears” after the baristas who serve coffee in Starbucks restaurants. To get the job done the company hired Janet Parks for vice president of merchandise and gave her permission to hire a team that is now 90 percent new. William Blair & Co. analyst Sharon Zackfia said the company should not stray too far away from their core customer – the coffee drinker . She said, “They”d never want to introduce something that”s going to alienate a coffee drinker. That”s trading a high margin customer for a low margin customer that”s probably not repeatable at that
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. Preserving that core beverage drinker is critical.” Zackfia said the reason merchandise sales look small is because their other sales are so large in comparison. Between 2004 and 2005 the company”s total net revenue rose 20.3 percent, according to a company press release.
Source: www.allheadlinenews.com