top of page

Insight of the Day: Starbucks’ late-night delivery pilot ‘doubled our business,’ CEO says

The Pilot Program

  • Concept: Starbucks partnered with a third party to prepare and deliver orders between 5 PM and 5 AM (when stores are traditionally closed).

  • Results: CEO Laxman Narasimhan claims the pilot doubled the company's business during that time frame.

  • Goal: Starbucks aims for a $2 billion business within five years using this model.

Why Late-Night Delivery?

  • Complements Existing Growth: This strategy supports Starbucks' strong US delivery business, which has seen growth in ticket size and total transactions.

  • Addresses Traffic Declines: Starbucks, like many QSRs, has experienced less foot traffic in recent quarters, making late-night delivery an attractive option to boost sales.

Key Takeaways

  • No Extended Store Hours: This program importantly doesn't require Starbucks locations to be open or staffing traditional baristas late at night.

  • Rival Strategy: Many competing QSRs are focusing on extending store hours, offering new snacks, and catering to late-night customers who want to visit in person. Starbucks chooses off-site preparation and delivery instead.

  • Analyst Skepticism: Some analysts are doubtful that expanding delivery hours alone can significantly offset Starbucks' recent challenges and declining traffic.

Additional Considerations

  • Who's the Partner?:  Starbucks hasn't confirmed if this involves ongoing collaboration with GoPuff, or a new partnership entirely.

  • Innovation for Late-Night?: Will Starbucks create specific snacks or limited-time beverages tailored to late-night customers?

  • Competition: As more restaurants focus on late-night, Starbucks' delivery will need to stay competitive in speed and customer experience to succeed.


bottom of page