Starbucks Corp. customers loaded a record $700 million on to the Seattle coffee chain's prepaid card accounts during its most recent quarter, up 39% from a year earlier.
Starbucks Card sales and the company's card-based loyalty program "contributed significantly" to record revenues during the period, Howard Schultz, Starbucks' chairman and chief executive, said during a conference call Wednesday to discuss earnings. Its first quarter ended Jan. 2.
In the year since launching the My Starbucks Rewards program, Starbucks has added 2.5 million new accounts, "driving loyalty and repeat business," Schultz said.
During peak sales volume periods during the quarter, Starbucks sold 42 of its prepaid cards per second across the U.S., he said.
Starbucks also had "substantial growth" in prepaid card sales during the quarter through retail channels outside of company-owned stores, Schultz said, adding that card sales trends "bode extremely well" for the program's future.
Starbucks this year will begin to extend its prepaid card and loyalty program into international markets, John Culver, the president of Starbucks' international operations, told analysts. He did not specify the countries or regions.
And Starbucks will push the loyalty program harder in the U.S., said Troy Alstead, its chief financial officer.
"Despite the clear success of My Starbucks Rewards, we believe there is still substantial opportunity to grow the program, as customer awareness is still relatively low," Alstead said. "We expect to drive more awareness and usage to enhance communication of the program and its benefits in the future."
Starbucks announced on Jan. 19 that it has expanded its smartphone payment system based on the Starbucks Card to 6,800 stores in the U.S.
The system allows Starbucks Card users to pay at the point of sale with a bar code displayed on the screen of an Apple Inc. iPhone or a Research In Motion Ltd. BlackBerry.
The application that generates the bar code also permits Starbucks Card users to check the balance and reload the card. Since many card users reload their cards at the point of sale, Starbucks said providing the app can save time at the cash register by allowing users to perform this function while waiting in line.
Starbucks said it put the app on BlackBerry handsets ahead of the popular Google Inc. Android system because it better suited customers who buy coffee with co-workers while using company-issued BlackBerrys.
