Starbucks will test delivery services in New York, Seattle this year

March 18, 2015, 5:48 PM UTC
Howard Schultz CEO of Starbucks poses during an interview with Reuters in Shanghai
Howard Schultz CEO of Starbucks poses during an interview with Reuters in Shanghai April 19, 2012. Starbucks Corp wants to make its mainland China expansion a family affair. The world's biggest coffee chain is opening cafes in China at a rate of one every four days in its quest to expand from about 570 shops today to more than 1,500 by 2015. REUTERS/Carlos Barria (CHINA - Tags: BUSINESS COMMODITIES) - RTR30XON
Photograph by Carlos Barria — Reuters

Starbucks (SBUX) is a company worth $70 billion at current stock prices. But CEO Howard Schulz reckons the coffee store chain’s valuation can reach $100 billion, and offering delivery is one way the company expects to achieve that goal.

Schulz laid out his plan for growth to shareholders at the company’s annual meeting on Wednesday.

“The long history of Starbucks is steeped in trying to build a different type of business proposition from Day One: one that achieves the balance between profitability and a social conscience,” Schultz said at the meeting.

A key effort will be to test food and beverage delivery options, helped by a mobile ordering and payment loyalty program Starbucks is rolling out and that will be completed in 2015.

Starbucks will introduce two different, but complementary methods to offer delivery.

In partnership with Postmates, a leading on-demand delivery service, customers will be able to order their food and beverage items via the Starbucks mobile app and get on-demand delivery in certain areas.

Postmates operates in 22 markets and has completed 1.5 million deliveries so far.

This Starbucks delivery pilot will begin in Seattle in the second half of 2015.

Another option will be aimed at office workers: the “Green Apron” barista delivery option will let customers in specific office buildings place orders that will be delivered by Starbucks baristas. Starbucks starts testing this option in New York the second half of 2015.
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Separately, Starbucks announced Wednesday that its Board of Directors has declared a two-for-one stock split. Shareholders of record as of March 30, 2015, will receive one additional share for each share held on the record date.

Starbucks shares have been trading near all-time highs lately, fueled by record revenue of $16.4 billion last fiscal year, up 11% from a year earlier.

At the meeting, Schultz is expected to flesh out his controversial initiative to have baristas engage in conversations with customers about the state of race relations in the U.S., announced earlier this week. The news sparked rigorous debate on social media as to whether this was the best way for Americans to debate this hot-button issue, and whether it would hurt service.

“Doing what is right for society and what is right for business cannot be mutually exclusive endeavors. Today more than ever, companies such as Starbucks must use their resources to create opportunities for their people as well as for the communities they serve,” said Schultz in a statement ahead of the meeting.