Starbucks Shareholders
Ted S. Warren/APStarbucks CEO Howard Schultz, left, stands with Oprah Winfrey after announcing a partnership to offer Teavana Oprah Chai tea at the company's annual meeting in Seattle on Wednesday.
By Leslie Patton

Starbucks (SBUX) is going big on booze.

Starbucks will expand its evening alcohol and light bites menu, which includes bacon-wrapped dates and Malbec wine, to thousands of stores, Chief Operating Officer Troy Alstead said in a phone interview. The rollout, which can help boost sales, will take several years, he said.

"We've tested it long enough in enough markets -- this is a program that works," he said. "As we bring the evening program to stores, there's a meaningful increase in sales during that time of the day."

Starbucks has been focused on selling more non-coffee items, such as alcohol, juice, Teavana tea and food, to stoke U.S. growth. The company also is expanding and improving its rewards program and mobile applications. Earlier this month, Starbucks said it would soon test a way for customers to order items ahead of time with their smartphones.

The shares rose 1.8 percent to $75.91 at the close Wednesday in New York. The Seattle-based company has dropped 3.2 percent this year, compared with a 0.7 percent increase for the Standard & Poor's 500 index (^GPSC).

The company first sold alcohol in October 2010 at a Seattle store. In January 2012, Starbucks said it was expanding the test to as many as 25 locations in Chicago, Atlanta and Southern California. In Chicago, the after-4 p.m. menu includes fare such as truffle macaroni and cheese, chicken skewers, Chardonnay and chocolate fondue.

Urban Areas

The evening food and drinks, which are in about 40 stores now, won't work in all Starbucks cafes, Alstead said. He said they've seen success in some urban areas, near other restaurants and theaters, where people are out at night.

Last month,
Chief Executive Officer Howard Schultz handed over the company's day-to-day operations to Alstead, so Schultz could focus more on digital, mobile, loyalty and electronic-commerce initiatives. The company said Wednesday in a statement that its mobile-payment application has been gaining traction.

Mobile payment now accounts for 14 percent of in-store transactions in the U.S., up from a 10 percent rate disclosed in July. Starbucks also said it will open at least 20 additional Teavana stores in the current fiscal year.

"Mobile is very important," Peter Saleh, a New York-based analyst at Telsey Advisory Group, said in a phone interview. "The companies that are taking share are the companies that have some mobile, digital platform -- Papa John's (PZZA), Domino's (DPZ), Starbucks, Dunkin' (DNKN)."

Loyalty Program

Starbucks's loyalty program entices diners by offering free beverages, food and refills in return for points they've accumulated from purchases. Customers can pay with mobile phones or Starbucks cards that are linked to their account.

As part of its effort to sell more tea, the company will begin offering Oprah Winfrey-branded chai tea on April 29 at stores in the U.S. and Canada, Schultz said at the company's annual meeting Wednesday. Winfrey, the television personality and entrepreneur, tasted different tea varieties and helped Starbucks create the blend, which includes black and rooibos teas.

"This felt like something that I really loved, that I really cared about," Winfrey told Schultz at the meeting. Starbucks will donate money from the tea's sales to charities that support youth education.

Starbucks bought Teavana Holdings last year in a transaction valued at about $626 million. It has since been expanding the brand and plans to open tea bars in Chicago and Los Angeles this fiscal year.

Starbucks has more than 20,100 locations worldwide, including about 11,500 in the U.S.


Oprah Gives Starbucks Tea Push A Celebrity Shot With Chai Drink

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58 Comments

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Cate

So if it is now a bar then kids can't go in.

March 23 2014 at 11:47 PM Report abuse rate up rate down Reply
Chip's Haven

Sure, sure, because that's the pace I think of first when I want a drink...NOT!

March 21 2014 at 4:10 AM Report abuse rate up rate down Reply
chefdorsback

Starbucks is crap anyways. It os overpriced and over-rated. The booze thing won't happen here!!!

March 21 2014 at 3:19 AM Report abuse rate up rate down Reply
joanja

starbucks is too much anyway for coffee! crazy pricing try lowering prices then u
get more people!!

March 21 2014 at 2:47 AM Report abuse rate up rate down Reply
ken

She gave us Obama now this................

March 21 2014 at 1:47 AM Report abuse rate up rate down Reply
1 reply to ken's comment
Chip's Haven

Of course she did because she is the only one that voted right??????? Never mind all the Americans that voted for him...TWICE!

March 21 2014 at 4:09 AM Report abuse +1 rate up rate down Reply
Debbie

Great just another place for our teens to get booze

March 21 2014 at 1:05 AM Report abuse +1 rate up rate down Reply
frenchcookie60

Thatz just great now we"ll have wide awake drunks!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

March 21 2014 at 12:37 AM Report abuse +1 rate up rate down Reply
relicsvirginia

that's good for them.Because, it would take someone drunk to pay $7.00 for a 99 cent cup of coffee.

March 21 2014 at 12:25 AM Report abuse +2 rate up rate down Reply
1 reply to relicsvirginia's comment
Miss Scotty

Where do you get your logic? There is no drink at Starbucks that costs $7. Sbux brewed coffee is between $1.50 and $2.25 depending on the size. The only drink you could possibly make cost $7 is a Venti Frappuccino with six extra shots of espresso, caramel drizzle, and soy milk.

March 21 2014 at 2:05 AM Report abuse +1 rate up rate down Reply
ecamp79228

Starbucks hates God too with our heros in war!

March 20 2014 at 10:30 PM Report abuse rate up rate down Reply
ecamp79228

Heard Starbucks refused free product to Marines serving in Iraq and never had their coffee but White Castle the best coffee and always there for the ones in war for the USA and Starbucks wasnt!

March 20 2014 at 10:22 PM Report abuse +2 rate up rate down Reply
2 replies to ecamp79228's comment
Miss Scotty

You heard wrong. That was a hoax that went around in emails years ago and yet people still choose to believe it. Here is an article proving this:

http://www.snopes.com/politics/military/starbucks.asp

And here is an article showing Schultz donating $30 million to veterans with PTSD:

http://www.dailymail.co.uk/news/article-2585082/Starbucks-CEO-Howard-Schultz-donates-30m-U-S-troops-help-fund-study-PTSD-leave-Afghanistan.html?ITO=1490&ns_mchannel=rss&ns_campaign=1490

Please do your research before you go around passing God's judgment. I don't think God would approve of you spreading false witness. Just sayin'.

March 20 2014 at 11:32 PM Report abuse rate up rate down Reply
1 reply to Miss Scotty's comment
Gg

that was a jolt.

March 21 2014 at 12:58 PM Report abuse rate up rate down
weirdo

If you check snopes.com, that was never true, just a rumor.

March 21 2014 at 1:31 AM Report abuse +1 rate up rate down Reply