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Starbucks to Give Customers What They Want -- Booze!

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Starbucks Corp. (NASDAQ: SBUX) has been testing alcohol sales at some 40 of the company’s 11,500 U.S. stores, and the coffee purveyor said it is ready now to begin rolling out an evening menu of light snacks and alcohol. Starbucks’ COO told Bloomberg News that the roll-out will take several years.

Not all Starbucks stores will adopt the change. The company has figured out that the evening menu succeeds where there is some reason for people to be out and about at night. In general these include urban areas near other restaurants and theaters.

The sale of food (Starbucks calls it “light bites”) and alcohol is just another arrow in CEO Howard Schultz’s drive to make Starbucks a $100 billion company. Among other initiatives to roughly double the firm’s market cap are the new mobile payment system, a loyalty program that offers free beverages and food for accumulated points, and expansion of the company’s Teavana stores. Schultz even got Oprah Winfrey to help Starbucks put together an Oprah-branded chai that will hit the stores in late April.

Starbucks’ success since Schultz returned as CEO in 2008 is well-documented. He has not been afraid to try new things, though he was blindsided by McDonald’s Corp.’s (NYSE: MCD) move into selling coffee drinks. What that did is force the company to look elsewhere for business and it seems to have found it at every turn.

Since Schultz’s return, Starbucks’ stock price has risen more than 300%, while McDonald’s shares are up 60%. McDonald’s market cap is nearly double that of Starbucks — $95 billion to $57 billion — but $50 billion companies that are not in tech are not generally thought of as growth companies.

Selling booze at Starbucks will work because the company has laid the groundwork and is looking at alcohol sales as just one part of a drive to boost revenue and profits.

Shares closed up 1.76% on Wednesday, at $75.91 in a 52-week range of $55.96 to $82.50. Shares were up another 0.4% in after-hours trading, and that was on a day that the Nasdaq Composite closed down nearly 26 points, or 0.6%.

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