Starbucks Brings Gifts Cards to China - Analyst Blog


Leading coffee maker, Starbucks Corporation ( SBUX ), has an impressive loyalty program which helps it to maintain a large customer base and ensure steady revenue growth.

Starbucks is now geared to expand its loyalty program into the growing market of China in time to tap the demand boom during the coming Lunar New Year. On Jan 3, 2014, Starbucks introduced Gift Cards at select locations in Mainland China. The cards are available in three new designs - Thank You, Kind Regards and Happy Lunar New Year.

The timing of the introduction of the gift cards is appropriate to make the most of the festivities surrounding the New Year celebration in China beginning Jan 31, 2014. It also offered Lunar New Year Gift Cards to all the participating stores in the U.S.

Starbucks holds a leadership position in digital, card, loyalty and mobile capabilities. The company effectively uses social/digital media to drive customer awareness and thereby, improve traffic flow. A large number of its customers are opting for Starbucks card as their preferred mode of payment which bodes well for the company's growth. Starbucks' loyalty cards are gaining popularity and, at present, nearly one-third of the U.S. transactions are made by My Starbucks Rewards loyalty members.

Starbucks Loyalty Cards are gaining popularity and around 80,000 members are being added each week. As of Sep 30, 2013, over 450 million customers have used the card to buy products in Starbucks outlets across 27 countries worldwide. The loyalty cards have added $16 billion of revenues since its launch 12 years ago. Starbucks aims to almost double My Starbucks Rewards membership through such initiatives. At the end of fiscal 2013, the company had 6 million active members.

Starbucks is continuously expanding its store base outside the U.S. - especially in the Asian market - buoyed by the increasing popularity of the Starbucks brand across the region. Starbucks' business in China is rapidly growing and the region is expected to become its second-largest market by 2014.

Starbucks carries a Zacks Rank #3 (Hold). Better-ranked stocks in the retail/restaurant sector include Fiesta Restaurant Group, Inc. ( FRGI ) , The Cheesecake Factory Incorporated ( CAKE ) and Cracker Barrel Old Country Store, Inc. ( CBRL ). While Fiesta Restaurant sports a Zacks Rank #1 (Strong Buy), Cheesecake Factory and Cracker Barrel carry a Zacks Rank #2 (Buy).

CHEESECAKE FACT (CAKE): Free Stock Analysis Report

CRACKER BARREL (CBRL): Free Stock Analysis Report

FIESTA RESTRNT (FRGI): Free Stock Analysis Report

STARBUCKS CORP (SBUX): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: CAKE , CBRL , FRGI , SBUX

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