While much of the frenzy around the holidays invokes images of Wal-Mart (WMT) door busters and Amazon (AMZN) warehouses, Starbucks is proving itself to be one of the kings of the season.
The coffee giant has announced that one out of every seven Americans received one of its gift cards this holiday season. That’s up from one in eight Americans in 2013. Doing a little math (based on the U.S. Census Bureau’s population clock of about 320 million Americans), that implies that nearly 46 million received Starbucks gift cards in 2014 versus about 40 million in the year-earlier period.
It isn’t exactly a surprise that Starbucks (SBUX) would do so well when it comes to generating gift card sales during the key retail shopping season. A National Retail Federation survey recently reported that one in five had planned to pick up coffee shop gift cards this holiday season, one of the most popular choices for gift cards.
A Starbucks spokeswoman told Coins2Day that nearly 2.5 million Starbucks cards were activated on Christmas Eve alone, implying the coffee company benefits greatly from those looking to scoop up a last-minute gift. And more than $1.1 billion were loaded on the company’s cards in the U.S. And Canada throughout the most recent holiday season. To add some perspective, Starbucks generated $16.4 billion in revenue globally in the most recent fiscal year.
Gift cards are a popular strategy employed by retailers to generate more traffic to their stores, and Starbucks is particularly good at incorporating those dollars into its loyalty program. The value of a gift card can be uploaded and combined with a java lover’s Starbucks card, which offers broader rewards and discounts, as well as promotions (including the recently announced “Starbucks for Life” promotion).
