There’s apparently a new pumpkin king in town.
Starbucks Pumpkin Cold Brew has outsold the chain’s traditional Pumpkin Spice Latte since the products made their return in August. That helped generate record sales for the Seattle-based coffee giant’s entire pumpkin line.
And that in turn helped Starbucks’ sales improve better than the company expected, speeding its recovery from the pandemic. Same-store sales declined 9% in the U.S. in the fiscal fourth quarter, far better than the 60% declines the company saw during the depths of the crisis.
Same-store sales declined 9% in the U.S. in the fiscal fourth quarter ended Sept. 27—far better than the 60%-plus declines during the depths of the pandemic.
“I could not be more pleased with our U.S. sales recovery, which progressed faster than we anticipated,” CEO Kevin Johnson said on Thursday.
The biggest jump came in September when same-store sales declined 4%--still far off the company’s growth in a typical month but 700 basis points better than August, a jump attributed in part to the pumpkin lineup.
But pumpkin wasn’t the only thing behind the improvement. Consumers have dramatically shifted the way they’ve used Starbucks in particular, coming in less often but ordering a lot more when they do. Comparable store transactions plunged 25% in the quarter, but average check was up 21% even though the company didn’t take price.
Instead, consumers ordered more beverages at one time, perhaps making larger Starbucks runs. They also ordered more food when they went in.
Starbucks also reopened stores and seating inside of its restaurants, and improved its drive-thru performance as well, which further led to improved sales. It is adding curbside pickup to more U.S. locations and is adding handheld point-of-sale devices to improve productivity.
And, executives said, the company’s sales recovery has continued. “The strong momentum that we enjoyed exiting September has continued into the month of October,” CFO Patrick Grismer said.
Still, executives also cautioned that the rate of improvement will slow the closer they get to even with pre-COVID levels. And executives believe it could be to the end of the second quarter—or March—before it fully recovers.
Starbucks expects its same-store sales to grow between 17% and 22% in the next fiscal year. “This assumes that we are able to continue to restore seating and operating hours in our U.S. stores, nearing full capacity by the end of the second quarter,” Grismer said.
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