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Starbucks (SBUX) Ties Up With Delta to Boost Loyalty Offerings

Starbucks Corporation SBUX recently announced a strategic agreement with Delta Air Lines, Inc. DAL to offer reciprocal earning and redemption benefits to Starbucks Rewards and Delta SkyMiles loyalty program members.

Starting Oct 12, 2022, the alliance will facilitate customers to earn and redeem free coffee and miles. Per the agreement, customers need to link their respective accounts to receive miles on purchases made at U.S. Starbucks locations. The initiative allows members to earn one mile per $1 spent at Starbucks and double Stars on days traveling on Delta.

Also, Delta SkyMiles announced the addition of Starbucks Stars as a new Choice Benefit. Starting in 2024, the initiative allows Diamond and Platinum SkyMiles Members to select 4,000 Starbucks Stars as one of their annual Choice Benefits. The agreement signals an expansion in benefits for loyalty members of both companies.

Ryan Butz, vice president, loyalty strategy and marketing at Starbucks, stated, “Starbucks Rewards and Delta SkyMiles are centered on creating moments of meaningful connection, and by bringing together two of the country’s most celebrated loyalty programs we are able to reward our members with more of what they love. We are excited to partner with Delta to offer our members even more valuable benefits, as well as invite more customers to join Starbucks Rewards.”

Increased Focus on Loyalty Program

The company made progress regarding personalized digital relationships to expand its reach with members. This includes program enhancements like Stars for Everyone. Starbucks initiated payment partnerships with PayPal and Bakkt, allowing customers to reload their Starbucks cards through a range of cryptocurrencies (including Bitcoin and Ethereum) coupled with the option of converting digital currencies to physical currency. The company is exploring the blockchain platform for ways to connect the Starbucks Rewards program with other merchant rewards programs and the motive of tokenization of stars. The initiative paves a path for the exchange of value across brands, enhanced digital services and the swapping of other loyalty points for stars. Moreover, the company launched account-linking partnership with Air Canada. The company will likely highlight this format as it might serve as the foundation for a new modern payment that aligns expenses with the value received by customers and merchants.

Zacks Investment Research
Zacks Investment Research


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In the past three months, the company’s shares have gained 11.1% compared with the industry’s 0.1% growth.

Zacks Rank & Key Picks

Starbucks currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some other top-ranked stocks in the Zacks Retail-Wholesale sector are Wingstop Inc. WING and Yum China Holdings, Inc. YUMC.

Wingstop carries a Zacks Rank #2 (Buy). Wingstop has a long-term earnings growth of 11%. Shares of the company have declined 29.2% in the past year.

The Zacks Consensus Estimate for Wingstop’s 2023 sales and earnings per share (EPS) suggests growth of 17.5% and 18.4%, respectively, from the year-ago period’s levels.

Yum China carries a Zacks Rank #2. Yum China has a long-term earnings growth of 10%. Shares of the company have declined 24.8% in the past year.

The Zacks Consensus Estimate for Yum China's 2023 sales and EPS suggests growth of 19.9% and 85.5%, respectively, from the year-ago period’s levels.


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Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
 
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Yum China (YUMC) : Free Stock Analysis Report
 
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