Sometimes it is the tried-and-true things that deliver the best impact for a business. Coffee giant Starbucks (SBUX) is going back to one of the oldest kinds of rewards program there is: the buy-X-get-Y-free plan. And though it is only in its testing stage right now, it is drawing interest. It is also drawing attention from investors, who sent Starbucks shares up fractionally in Monday afternoon’s trading.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Certain loyalty program members are getting access to the Coffee Loop program, where Starbucks offers the all-too-familiar plan: buy nine coffees, get one free. Space in the test plan is limited, reports note, and Starbucks also made it clear the plan could end at any time. Further, the plan is limited to hot or iced coffee only, so anyone who wants a higher-end drink will be out of the Coffee Loop on this one.
Those who do not get in right away will be added to a waitlist, reports note, and Starbucks is mostly using this as an information-gathering operation. A Starbucks rep noted, “We look forward to learning more from our customers and partners (baristas), and don’t have any further details to share on the future of the program.”
Another Labor Problem
Starbucks has another labor problem on its hands, and one featuring the intersection of several political philosophies at once, which represents a serious problem for the company. This time, the focus is on Briar Wolf, a “54-year-old trans woman” who got in a bit of a confrontation in a store over a pride flag.
Wolf was fired for yelling at a customer who tried to tear down a pride flag in the shop, and for “failing to deescalate” a situation. Apparently, the customer who came in subsequently left the store and returned to the drive-thru window, where the situation continued. This got an arm of Starbucks Workers United involved, calling Starbucks’ response a “…disgusting display of how Starbucks does not actually protect its queer and LGBTQ workers. And will throw all of its workers under the bus when we’re facing any real danger.” Starbucks itself did not comment, reports noted.
Is Starbucks Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 13 Buys, six Holds and one Sell assigned in the past three months, as indicated by the graphic below. After an 11.5% loss in its share price over the past year, the average SBUX price target of $101.28 per share implies 18.68% upside potential.
