Starbucks Expands U.S. Deliveries in Bid to Reignite Growth

(Bloomberg) -- Starbucks Corp., on a mission to spark sales growth in its home market, is expanding its delivery service to more than 2,000 U.S. locations next year.

The company is building on its existing partnership with UberEats, which started in September in Miami, to focus on seven metropolitan areas, Chief Operating Officer Roz Brewer said. She spoke in an interview ahead of the company’s investor day in New York.

With the increasing popularity of takeout and delivery, the UberEats tie-up may give a lift to Starbucks, whose domestic same-store sales rose just 2 percent in fiscal 2018 -- down from 3 percent the previous year and 6 percent in fiscal 2016. But it remains to be seen whether Americans’ appetite for delivery service extends beyond traditional meals to morning coffee and the lighter fare offered by Starbucks.

While the chain has already said it’s closing about 150 locations in the U.S. this fiscal year, it’s still experiencing net growth. Starbucks is opening about 350 new cafes over the same period, the company said Thursday. It’s focused on locations in the Midwest and Sun Belt with new drive-through locations, Brewer said.

The company’s also experimenting with smaller locations that only accept mobile orders and payments. Currently, there’s one such cafe in the Empire State Building and another in its Seattle headquarters, Brewer said. It also just opened a high-end roastery in New York City -- all part of a push to challenge ideas of what a Starbucks can be.

Starbucks shares rose 0.5 percent to $66.46 at 2:29 p.m. in New York on Thursday. The stock has gained 15 percent so far this year through Wednesday’s close.

To contact the reporters on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net;Craig Giammona in New York at cgiammona@bloomberg.net

To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Jonathan Roeder

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