Starbucks Corp. released its Q1 earnings this week with mobile order sales and sales, especially in China, showing strong growth.
Mobile orders represented 25% of U.S. company-operated transactions in Q1, up from 17% before the pandemic, said Starbucks CEO Kevin Johnson in an earnings call. Johnson called the accelerating growth of digital customer relationships and customer engagement a highlight of the quarter. Last quarter’s launch of “Stars for Everyone” via the mobile loyalty app, for example, set it up for growth.
“Our 90-day active Starbucks Rewards member base to whom we directly communicate and provide personalized offers increased by 2.5 million members in Q1 to a record 21.8 million,” he said. “Now this result surpassed our pre-COVID member base, representing a 15% increase relative to the same quarter in the prior year.”
As the number of active Starbucks Rewards members grew during the quarter, so did their engagement. “Rewards customers contributed 50% of U.S. company-operated sales in Q1, up from 43% last year before the onset of COVID-19 and up from 47% in the prior quarter, demonstrating our loyal customers resilience and affinity for Starbucks,” Johnson said. “Any way you look at it, our first-quarter results were quite strong in the U.S., particularly considering the headwind we faced from the current surge in COVID infections.”
In China, mobile was even more popular, and the number of 90-day active rewards members grew to 15.4 million in Q1, a record increase of 51% versus the prior year and 14% over the previous quarter.
With Starbucks Now Mobile Order & Pay services available across 99% of China’s locations, and Starbucks Delivers in 85% of the locations, mobile order sales mix hit a record 30% of the company’s China sales, up from 26% in the last quarter with 14% driven by Starbucks Delivers and 16% from Starbucks Now.
“Rewards customer engagement continues to grow as mobile ordering has more than doubled in China over the past year,” Johnson said. “Starbucks remains Chinese consumers’ first choice in the away-from-home coffee category and is the most talked-about coffee brand on social media in China. The brand is stronger than ever in our fastest-growing market.”