Starbucks borrows billions from its own customers... with gift cards Starbucks is well known for its rewards programs, which give caffeine junkies a mobile app and gift cards to load up cash, earn stars, and redeem them for more jitter-bean juice. But what’s less commonly known is that all of the money Starbucks customers load onto their gift cards and into their apps also functions as a $1.6B loan to Starbucks. And, as Canadian writer JP Koning shows in a detailed blog post (which is worth checking out), it’s a great deal for Starbucks. Big ’Bucks uses its customers as creditors… And Starbucks doesn’t have to pay any interest on all that money that customers “lend” it. Starbucks also offers bonds, but it has to pay back its creditors interest of between 0.46% and 4.5%. But customer gift card totals aren’t just a cheaper way to borrow -- they actually make Starbucks money: The Seattle chain brings in $155m every year from unredeemed balances -- which means Starbucks’ gift card program effectively lets it borrow cash at a negative 10% interest rate. So… why doesn’t every company do this? Some companies try: PayPal, for example, also receives about $20B in loans from its customers -- and it pays no interest. But it has to keep money in reserve in case its customers withdraw their cash en masse. Starbucks, on the other hand, just has to keep a reserve of… coffee. So S’Bucks can earn waaaay more in interest than PayPal. Other retailers could conceivably use prepaid gift cards to bring in free financing -- although few of them do it as well as Starbucks. Walmart, for example, does 20x as much in sales as Starbucks ($500B vs. Starbucks’ $25B), but has a similar amount of gift card cash in its bank ($1.9B).
Ordinarily I wouldn't think something like this would matter to an operation like Starbux, but ya know, this might dig into their top-line, especially in locations where they are near a Panera... which from what I see, are probably some of their best performing shops. High foot traffic retail centers. I think its a great marketing move on Panera's part, albeit you'll get a lot of folks like Handle123 that'll take up a whole table (meant for for 4) all morning while they suck up the free wifi and the all you can drink java, but it'll certainly boost sales of other high margin stuff. My question is, will Starbux feel a little sting? Thoughts? _____________________________________________________ Panera Launches MyPanera+ Pilot Program ($7.99/Month For Unlimited Coffee)
Starbucks diversity Starbucks will link executive pay to success in meeting its diversity targets, as of next year. There are as yet few details on how executive pay will be affected, but the targets include 30% BIPOC (Black, Indigenous and People of Color) employees at the corporate level, and 40% BIPOC employees in retail and manufacturing, by 2025. CNN
UM.... BIPOC? Maybe they should really put their money where their mouth is and let "UM" in the above = Uyghur Muslims. Oh I forgot... that would be bad for business. Wall Street would not be happy. ...Diversity. Starbucks' China Goals: A New Store Every 15 Hours for 5 Years Starbucks plans to double its store count to 6,000 China units across 230 cities by the end of 2022. Starbucks’ potent China business has been the subject of many growth conversations in recent quarters for the brand, making May 15th's inaugural Investor Conference a natural step. Even so, the figures Starbucks shared with investors were jaw-drop worthy. No. 1: The fact Starbucks plans to open a China restaurant ever 15 hours for the next five years. “No Western company or brand is better positioned to evolve with the rapidly expanding Chinese middle class—and we continue to mindfully evolve a coffee culture in China where the reward will be healthy, long-term, profitable growth for decades to come,” Starbucks CEO Kevin Johnson said in a statement.
Can anyone else see the hypocrisy here? Starbucks (SBUX) started ramping up its diversity efforts a few years ago, soon after the arrest of two black men who were waiting for a friend at a Philadelphia Starbucks caused an uproar. CEO Kevin Johnson apologized for the incident and closed thousands of locations across the country for anti-bias training. In 2019, the company commissioned an assessment on its commitment to civil rights, diversity and inclusion. ____________________________________________________ ".....and we continue to mindfully evolve a coffee culture in China where the reward will be healthy, long-term, profitable growth for decades to come,” Starbucks CEO Kevin Johnson said in a statement. ___________________________________________________ https://www.amnesty.org/en/latest/news/2018/09/china-up-to-one-million-detained/ Families of up to one million detained in mass “re-education” drive demand answers The past year has seen an intensifying government campaign of mass internment, intrusive surveillance, political indoctrination and forced cultural assimilation against the region’s Uighurs, Kazakhs and other predominantly Muslim ethnic groups. Most of the detainees’ families have been kept in the dark about their loved ones’ fate and are often too frightened to speak out. “The Chinese government must not be allowed to continue this vicious campaign against ethnic minorities in northwest China. Governments across the world must hold the Chinese authorities to account for the nightmare unfolding in the XUAR,” said Nicholas Bequelin, Amnesty International’s East Asia Director. “The mass detention camps are places of brainwashing, torture and punishment. A simple act of messaging your family abroad can get you detained highlights how ludicrous, unjustified and completely arbitrary the Chinese authorities’ actions are,” said Nicholas Bequelin. “Families have suffered enough. Hundreds of thousands of families have been torn apart by this massive crackdown. They are desperate to know what has happened to their loved ones and it is time the Chinese authorities give them answers.” In a new briefing, China: Where are they? Time for answers about mass detentions in Xinjiang Uighur Autonomous Region, Amnesty International highlights the anguish of people who have lost touch with relatives and friends inside the XUAR and who fear they have been detained.