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Starbucks' profit shows Americans need coffee fix

Published on NewsOK Modified: April 25, 2013 at 6:21 pm •  Published: April 25, 2013

NEW YORK (AP) — Americans may not feel optimistic about the economy but they're still spending more at Starbucks.

The world's biggest coffee chain said Thursday that its profit rose in its fiscal second quarter as a key sales figure climbed in the U.S., its biggest market. New drinks and food, such as its sandwiches and pre-packaged lunch boxes, helped lift sales.

A 7 percent sales bump at U.S. cafes open at least 13 months came despite the broader industry's struggles to grow at a time when other fast-food companies say people are being more careful with money. McDonald's and Burger King saw sales decline during the first three months of the year and even Chipotle, which has grown rapidly in recent years, said sales at established restaurants grew just 1 percent.

Earlier this month, an Associated Press-GfK poll found only one in four Americans expects his or her financial situation to improve over the next year.

Starbucks has been evolving its mix of food and drinks and expanding overseas as it faces intensifying competition at home from fast-food chains, which are offering more lattes and frozen coffee drinks. For example, the company recently started rolling out Evolution bottled juices in its cafes and new baked goods from a San Francisco bakery chain are expected in all stores by the end of 2014.

Chief Financial Officer Troy Alstead said the hope is that Starbucks will become more of a lunch destination. He noted that traffic was growing in the afternoon hours, when traffic is generally slower than the morning rush.

The company also is making a big push behind its loyalty program, a move that's expected to get people to come back more often and spend more when they visit. A recent offer for a $5 gift card for joining the program resulted in 1 million new registered members, the company said.

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