Starbucks (SBUX)
- March 4, Open letter to all stakeholders
- increased cleaning and sanitizing for all company-operated stores
- pausing the use of personal cups and “for here” ware
- continue to honor the 10-cent discount for anyone who brings in a personal cup or asks for “for here” ware
- March 5, Updates on Starbucks China and Impact of COVID-19 on China Business
- Starbucks China was able to start re-opening doors again. On March 5, the company announced 90 percent of the stores are open again, operating under modified hours and conditions
- Last week, the Shanghai Reserve Roastery re-opened (Feb 26 in China) after being closed for more than a month
- During the month of February, Starbucks China’s comparable store sales were down 78% versus the prior year
- In the last fiscal week of February, relative to the prior week, average daily transactions per store improved 6% and total weekly gross sales in China grew 80%, reflecting the reopening of stores. In that last week, Starbucks China’s mobile orders accounted for approximately 80% of sales mix, with 30% Mobile Order & Delivery and 50% Mobile Order & Pay.
- currently estimate that comparable store sales in China for Q2 FY20 will be down approximately 50% versus the prior year. Therefore, we expect a COVID-19-related headwind of approximately $400 million to $430 million to China’s revenue in Q2 FY20 versus prior expectations.
- March 6, Letter to partners
- First confirmed case: late last night (March 5), we learned one of our store partners at our 1st & University store in downtown Seattle was diagnosed with COVID-19 and is self-isolating at home for a period of time.
- closed the store and initiated a deep clean overnight, following all recommended guidelines from the City of Seattle and King County public health authorities
- these officials have encouraged us to reopen the store after further preventative cleaning, which we have already conducted, staffed by partners who have no known impact from COVID-19
- look forward to welcoming our customers back very soon
- First confirmed case: late last night (March 5), we learned one of our store partners at our 1st & University store in downtown Seattle was diagnosed with COVID-19 and is self-isolating at home for a period of time.
- March 11, Letter to partners
- temporarily expanding catastrophe pay for COVID-19 partner care, in addition to benefits like sick pay, vacation pay or personal time off as available. Any partner who has been diagnosed with or exposed to COVID-19, or comes in close prolonged contact with someone in their store or household who has, is eligible for up to 14 days of catastrophe pay – whether or not they are showing symptoms
- if have not had any known contact with someone diagnosed with COVID-19, but are showing symptoms, partners should stay home until remaining symptom-free for 24 hours. Can use temporary, expanded catastrophe pay for any scheduled shifts over a three-day period, and then similarly use additional benefits like sick pay, vacation pay or personal time off
- certain individuals may consider taking extra precautions. Should they choose to self-isolate, are also eligible for up to 14 days of catastrophe pay with a doctor’s noted recommendation
- The CUP Fund, started by partners, is always available. The fund is for partners to use when facing an unexpected financial hardship.
- Starbucks is matching 50 cents for every dollar of partners’ donation
- Other free mental health/counseling programs, including Employee Assistance Program, Headspace
- March 11, Letter to customers
- as we navigate this dynamic situation community-by-community and store-by-store, we may adapt the store experience by limiting seating to improve social distancing, enable mobile order-only scenarios for pickup via the Starbucks App or delivery via Uber Eats, or in some cases only the Drive Thru will be open
- we will close a store if we feel it is in the best interest of our customers and partners, or if we are directed to do so by government authorities
- March 12, $1.75 billion note offering
- completed a public offering pursuant to an underwriting agreement, under which Starbucks agreed to issue and sell to the several underwriters (i) $500,000,000 aggregate principal amount of its 2.000% Senior Notes due 2027 (the “2027 Notes”), (ii) $750,000,000 aggregate principal amount of its 2.250% Senior Notes due 2030 (the “2030 Notes”) and (iii) $500,000,000 aggregate principal amount of its 3.350% Senior Notes due 2050 (the “2050 Notes” and, together with the 2027 Notes and the 2030 Notes, the “Notes”)
- prospectus
- March 15
- Starting today, we will move to a “to go” model across the U.S. and Canada for at least two weeks to help prevent prolonged social gathering
- pausing the use of all seating
- Café, Mobile Order & Pay, Drive Thru and Delivery will still be open
- temporarily closing company-operated stores in high-social gathering locations like stores that are located inside malls or on university campuses
- In communities such as Seattle and New York with high clusters of COVID-19 cases, we will reduce operating hours or temporarily close select stores
- invest up to $10 million in the CUP fund
- temporarily expanding the Care@Work program to provide support for partners needing additional backup childcare options as a result of school closures.
- Starting today, we will move to a “to go” model across the U.S. and Canada for at least two weeks to help prevent prolonged social gathering
- March 17, Letter to customers
- track store hours and closures via our website or the Starbucks app
- delay the expiration of all Stars scheduled to expire between now and June 1, 2020
- March 20
- Today, we are making the decision to close access to our cafés altogether for two weeks and limiting our services to Drive Thru and delivery only.
- Some exceptions will be made for those cafés serving in or around hospitals and health care centers in our efforts to serve frontline responders and health care workers.
- changes apply to company-operated stores in the U.S. and Canada; licensed partners will make decisions for their properties
- Delivery continues to be another option from those Starbucks locations still open through Starbucks Delivers in markets across the United States and Canada through the Uber Eats app.
- To pay all store partners for the next 30 days, whether come to work or choose to stay home
- for stores in or around hospitals, or communities with limited food options, will remain open with partners who are explicitly choosing to continue to serve
- continue to work very closely with local, state and the federal government to continually assess how best to stay open, stay safe, and be part of the solution during this time
- Today, we are making the decision to close access to our cafés altogether for two weeks and limiting our services to Drive Thru and delivery only.
- March 21 (first day after store closure and drive-thru only)
- partners in every region around the U.S. and Canada showed up before dawn to open drive-thru-only experiences at their stores. They filled in for each other at short-staffed nearby stores. Stores that could open, did.
- March 22 (Restaurant Business Article)
- employees who work their shifts Mar.21 – April 19 are eligible for Starbucks Service Pay, worth an additional $3 an hour
Update: SBUX 1-month chart as of March 27
