Starbucks to expand evening alcohol sales to thousands of stores

03/20/2014 5:12 PM

03/20/2014 5:14 PM

Starbucks is going big on booze.

The purveyor of lattes and other coffee drinks will expand its evening menu of alcohol and light foods, which includes bacon-wrapped dates and Malbec wine, to thousands of stores, Chief Operating Officer Troy Alstead said. The rollout, which can help boost sales, is expected to take several years.

“We’ve tested it long enough in enough markets. This is a program that works,” he said. “As we bring the evening program to stores, there’s a meaningful increase in sales during that time of the day.”

Starbucks has been focused on selling more non-coffee items, such as alcohol, juice, Teavana tea and food, to stoke growth. The company also is expanding and improving its rewards program and mobile applications. Earlier this month, Starbucks said it would soon test a way for customers to order items ahead of time with their smartphones.

The company first sold alcohol in October 2010 at a Seattle store, and in January 2012 said it would expand to as many as 25 locations in Chicago, Atlanta and Southern California. In Chicago, the after-4 p.m. menu includes fare such as truffle macaroni and cheese, chicken skewers, Chardonnay and chocolate fondue.

The evening food and drinks, available in about 40 stores now, won’t work in all Starbucks cafes, Alstead said. He said they’ve seen success in some urban areas, near other restaurants and theaters, where people are out at night. Starbucks has more than 20,100 locations worldwide, including about 11,500 in the U.S.

Last month, Chief Executive Officer Howard Schultz handed over day-to-day operations to Alstead so Schultz could focus more on digital, mobile, loyalty and e-commerce initiatives. The company said in a statement that its mobile-payment application has been gaining traction.

Mobile payment now accounts for 14 percent of in-store transactions in the U.S., up from a 10 percent rate disclosed in July. Starbucks also said it will open at least 20 additional Teavana stores in the current fiscal year.

Starbucks’s loyalty program entices diners by offering free beverages, food and refills in return for points they’ve accumulated from purchases. Customers can pay with mobile phones or Starbucks cards that are linked to their account.

As part of its effort to sell more tea, the company will begin offering Oprah Winfrey-branded chai tea on April 29 at stores in the U.S. and Canada, Schultz said at the company’s annual meeting Wednesday. Winfrey, the television personality and entrepreneur, tasted different tea varieties and helped Starbucks create the blend, which includes black and rooibos teas.

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