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Target
is making it easier for customers to pick up their
Starbucks
order on the go, hoping it will give sales a boost heading into the second half of the year.
The retailer said Wednesday it was rolling out
Starbucks
(ticker: SBUX) curbside delivery at more than 1,700 stores nationwide starting this summer, after a successful pilot at select stores that started last fall. By October, all stores with a Starbucks cafe will have the option available,
Target
(TGT) said.
Starbucks and Target have been partners for over 20 years, and many customers today find a Target run synonymous with getting a Starbucks coffee—to the point where some of the company’s new shopping carts come with a built-in drink holder. The retailer served up more than 170 million Starbucks beverages in 2022 alone, executives said at a February investor day.
But as more customers opt for picking up their orders curbside, the company has had to find a new way to respond to shifting consumer preferences.
“Our guests have long told us Drive Up is a game-changer, adding convenience to their daily life, especially when they’re short on time,” said Mark Schindele, chief stores officer at Target.
Target added that Drive Up with Starbucks had “already proven highly popular” with guests. The three best-selling items were iced brown sugar oatmilk shaken espressos, birthday cake pops, and iced caramel macchiatos.
After shoppers receive a notification that their Drive Up orders are ready for pickup, Target’s app will ask whether they want to place an order from Starbucks. When they indicate they have arrived at the parking lot, an employee will bring up the Target and Starbucks order for free, Target said.
The Starbucks stores within Target are what the coffee chain considers licensed stores, meaning that Target operates the cafe—from employing baristas to implementing mobile order capabilities. They have long been a way for Target to increase foot traffic and enhance the customer experience, as well as add a boost to the company’s top line—given that any food and beverage sales flow through to Target.
Target has been riddled with issues over the past year, including excess inventory levels, lagging traffic, and tumbling headfirst into the culture war controversies that have plagued many consumer-facing companies this summer. Wall Street has gradually cooled on the shares, with many analysts downgrading the stock or lowering their price targets ahead of the company’s second-quarter earnings report, due next week.
Shares of Target dipped 0.2% to $130.90 in early morning trading Wednesday. The stock has shed 12% this year, underperforming the
S&P 500
‘s 17% gain.
Write to Sabrina Escobar at [email protected]
Read the full article here
