The new Starbucks rewards program could turn off core customers, analyst says
Starbucks Corp.’s new rewards program might help the company improve its margins, but Bernstein analyst Sara Senatore said it looks like a lukewarm deal for customers.
“We think this is moving in the wrong direction,” she wrote of the imminent changes to Starbucks Rewards, which will allow consumers to redeem fewer stars for small things like shots and premium milks but require a higher star threshold for “handcrafted” drinks as well as breakfast and lunch items. The current system allows “gold” members to use a flat number of stars for any item.Because Starbucks SBUX, +0.
“We believe Starbucks’ traffic deceleration reflects a diminished value proposition,” she wrote. “We think the new rewards plan runs the risk of alienating the core customers.” The revamped program goes into effect on April 16 and will let users redeem 25 stars for syrups and milks; 50 stars for bakery items and brewed hot coffees; 150 stars for “handcrafted” beverages and hot breakfast; and 200 stars for protein boxes and salads. Senatore has seen a “muted” reaction so far from customers on social media, but she said the “real test” will take place when the company actually enacts the changes.Senatore rates the stock at market-perform with a $66 price target.
“Ultimately we’re confident that the upcoming enhancements will lead to both continued growth and customer enjoyment of the program,” a Starbucks spokeswoman told MarketWatch. “We want to make sure we’re bringing immediate value and choice to the members.”Emily Bary Emily Bary is a MarketWatch reporter based in New York.
México Últimas Noticias, México Titulares
Similar News:También puedes leer noticias similares a ésta que hemos recopilado de otras fuentes de noticias.
New Tax Could Hurt Value of Some of New York’s Most Expensive HomesOwners of some of New York’s priciest real estate could face a dramatic drop in the value of their properties under a state plan to impose a so-called pied-à-terre tax in New York City.
Leer más »
Republican Senator proposes 'New Manhattan Project,' ridicules Green New Deal as 'assault on cars, cows'Tennessee's Senator Lamar Alexander dismissed the Democrat-proposed Green New Deal legislation and instead offered his own 'New Manhattan Project,' riffing on another landmark FDR-era initiative.
Leer más »
Lincoln set to debut all-new Corsair at New York International Auto Show in AprilThe New York International Auto Show is an annual event that serves as a platform for the world’s leading automakers to debut shimmering new models.
Leer más »
Analysis | The Energy 202: Democrats try to reset climate debate after Green New Deal defeatAnalysis: Democrats try to reset climate debate after Green New Deal defeat
Leer más »
Apple made 15 surprise announcements this week — here's everything it unveiledApple just unveiled new AirPods, new iPads, and more.
Leer más »
When customers do the math on Starbucks' new rewards program, they may not like what they seeBernstein said in a research note published Friday that upcoming changes to the Starbucks Rewards program could alienate its core customers.
Leer más »
Columbus McKinnon boosts dividend by 20%Columbus McKinnon Corp. said Tuesday it will raise its quarterly dividend by 20%, to 6 cents a share from 5 cents. The motion control products maker's new dividend will be payable May 13 to shareholders of record on May 3. Based on Monday's stock closing price of $33.35, the new annual dividend rate implies a dividend yield of 0.72%, compared with the implied yield for the S&P 500 of 2.03%, according to FactSet. Separately, the company approved a new $20 million stock repurchase program. The stock, which was still inactive in premarket trade, has gained 10.7% year to date while the S&P 500 has climbed 11.6%.
Leer más »