Starbucks 2014 Annual Report Download - page 9

Starbucks Corporation 2014 Form 10-K 5
Retail sales mix by product type for company-operated stores:
Fiscal Year Ended Sep 28, 2014 Sep 29, 2013 Sep 30, 2012
Beverages 73% 74% 75%
Food 18% 18% 17%
Packaged and single-serve coffees and teas 4% 4% 4%
Other(1) 5% 4% 4%
Total 100% 100% 100%
(1) "Other" primarily includes sales of ready-to-drink beverages, serveware and coffee-making equipment, among other
items.
In fiscal 2014, we moved ready-to-drink beverage revenues from the "Food" category to the "Other" category and combined
packaged and single-serve teas, which were previously included in the "Other" category, with packaged and single serve
coffees, which are now categorized as "Packaged and single-serve coffees and teas." Additionally, we revised our discount
allocation methodology to more precisely allocate sales discounts to the various revenue product categories. None of these
changes had a material impact on the composition of our retail sales mix by product type. Prior period amounts have been
revised to be consistent with the current period presentation.
Stored Value Cards
The Starbucks Card and our other branded stored value card programs are designed to provide customers with a convenient
payment method, support gifting, and increase the frequency of store visits by cardholders, in part through the related My
Starbucks Rewards® loyalty program. Stored value cards are issued to customers when they initially load them with an account
balance. They can be obtained in our company-operated and most licensed stores in North America, China, Brazil, and many of
our markets in the EMEA segment, as well as on-line, via the Starbucks mobile app, and through other retailers, including a
number of other international locations. Customers may access their card balances by utilizing their stored value card or the
Starbucks® mobile app in participating stores, which also includes certain Teavana®, Evolution Fresh™, and La Boulange®
locations. Customers who register their card in the US, Canada, and certain other countries are automatically enrolled in the My
Starbucks Rewards® program and can receive various benefits depending on factors such as the number of reward points
("Stars") earned in a 12-month period.
Licensed Stores
Revenues from our licensed stores accounted for 10% of total net revenues in fiscal 2014. Licensed stores generally have a
higher operating margin than company-operated stores. Under the licensed model, Starbucks receives a reduced share of the
total store revenues, but this is more than offset by the reduction in its share of costs as these are primarily incurred by the
licensee.
In our licensed store operations, we leverage the expertise of our local partners and share our operating and store development
experience. Licensees provide improved, and at times the only, access to desirable retail space. Most licensees are prominent
retailers with in-depth market knowledge and access. As part of these arrangements, we receive royalties and license fees from
and sell coffee, tea and related products to licensees for use in their operations or resale to customers. We also sell certain
equipment, such as coffee brewers and espresso machines, to our licensees for use in their operations. Employees working in
licensed retail locations are required to follow our detailed store operating procedures and attend training classes similar to
those given to employees in company-operated stores. For Teavana® and Seattle's Best Coffee®, as well as Starbucks® stores
within certain markets, we also use traditional franchising.