Specialist
Former C-level executive at Starbucks Corp
Agenda
- Coffee industry trends, focusing on Starbucks (NASDAQ: SBUX)
- Demand trends and near-term recovery outlook
- Labor costs – risks and implications of wage increases
- Footprint expansion and potential urban restructuring
Questions
1.
What developments have you been following within the coffee industry? What is your outlook?
2.
What should we understand about the industry’s recovery trajectory? How are premiumisation and customisation helping speed up industry recovery, if at all?
3.
Could you elaborate on the ongoing urban restructuring? Are the economics any more or less favourable? What are the considerations around format development in the post-pandemic world?
4.
How much improvement could we expect in the margin and productivity metrics? Will they be significant? Do you have any estimates or ranges in mind?
5.
You mentioned the potential USD 15 minimum wage increase, which failed the Senate a few days ago. If that came back, what would be the implications for Starbucks? What are the merits and drawbacks of a USD 15 starting wage?
6.
Do you think Starbucks’ unit economics might be more or less favourable in a post-pandemic environment when we consider its cost controls?
7.
What are your thoughts on Starbucks’ positioning vs peers? Are there any credible threats to Starbucks’ model?
8.
What is the end state for the Nestlé coffee alliance? What is the upside to it?
9.
What are your thoughts on McDonald’s efforts in selling gourmet coffee? How credible a threat is McDonald’s getting into the premium sector?
10.
What are your expectations for Inspire’s acquisition of Dunkin’ Brands?
11.
How might Starbucks’ peers handle an increase of the minimum wage to USD 15? What is their ability to manage that potential headwind?
12.
Do you have thoughts on any more of Starbucks’ peers, such as Peet’s Coffee?
13.
How significantly ahead is Starbucks when it comes to the digital ecosystem? Is it a leap ahead of McDonald’s, Tim’s, Dunkin’ and Peet’s?
14.
How important is the rewards programme for Starbucks vs its peers? Is it necessarily driving new consumers to the platform? How is it helping keep consumers loyal to the platform?
15.
What is the per capita consumption of coffee in the US? How does it compare to pre-pandemic and how might it change? Is per capita consumption higher amid coronavirus? Are the numbers easing?
16.
How viable a threat is the potential shift from coffee to energy drinks, especially when we consider the health trends in the industry?
17.
Where could the levels of at-home vs outside-of-home coffee consumption stabilise in a post-pandemic world? Do you have any expectations for the mix?
18.
What are your thoughts about Starbucks’ store opening schedule in China and other parts of the world? Do you think it will slow down at any point? What are penetration opportunities for store opening in Beijing and Shanghai over the next 1-3 years?
19.
How should we think about the function of Starbucks’ stores in China? Before the pandemic, Starbucks seemed to be focusing on opening large experience stores such as Starbucks Reserve, which is about 29,000 square feet per store, selling high-end coffee, snacks and alcohol. How do you expect the strategy to change, if at all?
20.
How should we think about the function of Starbucks’ stores in China? Before the pandemic, Starbucks seemed to be focusing on opening large experience stores such as Starbucks Reserve, which is about 29,000 square feet per store, selling high-end coffee, snacks and alcohol. How do you expect the strategy to change, if at all?
21.
What do you think will be the expansion strategy for the Starbucks Reserve café and bar mix?
22.
What are your thoughts on Starbucks’ potential upside from the challenges faced by its rival Luckin Coffee in China?
23.
You mentioned consumers in North America are craving to reconnect with others. How might this affect Starbucks? Do you think people will feel safe reconnecting?
24.
What are your thoughts on Starbucks’ product and menu innovation?
25.
Do you have any thoughts around Starbucks’ recent management changes, including the former CFO Pat Grismer’s retirement and COO Rosalind Brewer’s resignation?
26.
Is there anything else you would like to discuss?
27.
You seem very positive on the business. What is there to be negative on?
