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Changes to Starbucks Loyalty Program Spark Confidence and Increased Membership

When Starbucks announced changes to its Starbucks Rewards loyalty program back in February, the initial response from its customer base was negative. Program members questioned how the changes−where customers earn reward stars based on the amount of money they spend at Starbucks, rather than how often they visit−would create a positive experience.

Well, if early numbers mean anything, changes to the Starbucks Rewards program have not had an adverse effect on sales. In fact, during an April 21 earnings call with analysts, Starbucks officials said about 900,000 customers joined the loyalty program during the company’s fiscal second quarter.

That translates to an 8% increase compared to the first quarter and a 16% rise over the same period last year. AS a result, Starbucks now has about 12 million active loyalty program members in the U.S. Changes to the loyalty program became effective April 12.

“We are not seeing any of the noise that has been speculated on,” Matt Ryan, Starbucks’ Chief Strategy Officer, said during the call.

What’s more, Starbucks CEO Howard Schultz said of the modified loyalty program: “We’re building something so enduring and so unique I think it’s going to be one of the most significant changes to the equity of the brand.”

In the second quarter, Starbucks’ powerful 24,000-store global retail operation again drove record financial and operating performance, including record revenue, record profits, a 7% increase in comp store sales in the U.S., a 6% increase in comp store sales globally, and its 25th consecutive quarter of comp store growth at or above 5%.

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