Target Will Serve Starbucks At Curbside Pick-Ups

Target
TGT
Stores is adding food and drinks to curbside pickup at their stores throughout the U.S.A. It is a great idea to boost sales, customers can enjoy a cup while driving home without leaving their car.

Starbucks
SBUX
has been serving food and drinks in Target stores for several years. There are baristas in all stores and they are Target employees. Now these baristas will have to hustle to get hot coffee to the drivers in cars picking up ordered Target merchandise.

According to CNBC report Target starting testing the idea last fall and it proved popular with customers. Customers can pick up their drinks when picking up groceries, birthday presents or any other purchased order. Target says it proved to be popular. Among the favorites are iced brown sugar oat milk shaken expresso, birthday cake pop and iced caramel macchiato. Target said that they are the most frequently ordered items.

According to Target, curbside pickup has lead to more business in stores that had curbside Starbucks service. Target says that customers who drive-up for the first time end up are spending 20% to 30% more at Target than they did previously. Target has added additional curbside pickup items including been and wine.

Business has been slower at Target stores and while they will report earnings next Wednesday with somewhat slower sales, it is likely that their profits may have improved. Last year’s second quarter sales were 26.0 Billion and earnings per share were $0.39. It missed Wall Street expectations last year in three out of four quarters. For fiscal 2023 the company is predicting sales will range from low single digit decline to low-single-digit increase, and earnings per share will range between $7.75 and $8.75.

Starbucks has been diversifying its store format in recent years as customers tend to spend less time lingering in stores and ordering from home for quick pickups. The locations in Target and grocery stores drives sales for Starbucks.

POSTSCRIPT: It is very exciting to read about innovative ways to sell. Starbuck’s curbside pick-ups will add business and similarly Coach’s new youthful design of their stores sweeps away old cobwebs. It is time that retailers look at their stores and create a new reason to shop there. The standard for renovation is that every seven years retailers must look at their stores and update them to the mood of the moment. Target and Coach seem to do that and will attract more customers.