Starbucks Is Perking Up With Trends 'Moving Strongly In The Right Direction'

Starbucks Corporation (NASDAQ: SBUX) faces a more encouraging outlook for 2021 and beyond as trends are "moving strongly in the right direction" for the coffee chain and some of its rivals, according to foot traffic analytics firm Placer.ai.

What Happened: Foot traffic data shows visits to Starbucks stores are down just 21.3% year-over-year for the week beginning March 1, Placer.ai said in a soon-to-be-released report. This marks the brand's best performance so far in 2021.

By comparison, rival Dunkin' Donuts saw its foot traffic trends fall 15.4% year-over-year during the same time period. Panera Bread's 24.6% traffic decline in the first week of March marked its best performance since the COVID-19 pandemic began in early 2020.

Encouragingly, Starbucks' momentum can be traced to the start of February. Since starting the week of Feb. 8, Starbucks has shown consistent week-over-week growth as some form of return to normalcy started to play out and restaurants are reopening at a much faster pace compared to prior months.

Related Link: Keurig Dr. Pepper CEO On Coffee And Beverage Trends: 2020 Growth Part Of Longer-Term Momentum

Why It's Important: A return to normalcy is very important for the coffee segment as sales soar in the morning as people need their caffeinated fixes before work.

Data from Placer.ai notes that visits to Starbucks stores between 6 a.m. and 9 a.m. for the week of March 1 were 8.8% of all visits. This marks an improvement from 7.6% over the past three months, but is still shy of pre-pandemic levels of 10.4% of all visits.

What's Next: Coffee brands like Starbucks may want to consider targeting a new generation of work-from-home people by emphasizing longer stays, Placer.ai notes. This could drive larger transaction sizes and increase output throughout the day.

(Photo: Starbucks)