Looking for some holiday cheer? Customers who want to try Starbucks’s new holiday treat, the Frozen Peppermint Hot Chocolate drink, will have to go to Target, where it will be available exclusively throughout the holiday season at all in-store Starbucks cafés.
The drink is a crème Frappuccino with a blend of mocha sauce, milk, and ice, poured over a layer of peppermint-flavored whipped cream and red and green sprinkles, and finished with another layer of that same whipped cream and sprinkles.
Starbucks is hoping to capitalize on the holiday season and the holiday craze around its special drinks and limited-edition cups. And customer enthusiasm is high, as evidenced by this year’s limited-run “Bearista” cups—which have customers literally fighting and lining up at 3 a.m. to shell out $30 a pop.
“Last Thursday’s holiday launch was our biggest sales day ever in North America,” Starbucks CEO Brian Niccol said in a recent note. And according to the company, millennial and Gen Z customers are driving Q3 improvements in customer value perception. The new Frozen Peppermint Hot Chocolate appears to be an attempt to keep that momentum going.
The collaboration between the coffee chain and the big-box retailer debuts Monday for Target Circle 360 loyalty members, just in time for the busiest and most profitable time of the year: the run-up to Christmas Day. The rest of us will have to wait till tomorrow, Tuesday, November 18.
Both Starbucks and Target have been hit hard by consumer backlash and boycotts, respectively, at a time when Americans are buying less due to increased inflation and higher living costs.
Starbucks, which recently announced a wave of store closings, is under pressure to increase profits. At the same time, management is dealing with baristas protesting for higher pay and better hours. (Last week, unionized workers went on strike at more than 65 Starbucks locations across 42 cities.)
Meanwhile, Target is facing its own problems as customers boycott the stores due to the retailer’s rollback of diversity, equity, and inclusion (DEI) programs. It’s also contending with lower in-store foot traffic.
Starbucks financials
Starbucks reported fourth-quarter earnings on Wednesday, October 29, with quarterly same-store sales growing for the first time in nearly two years and global same-store sales rising 1%. However, same-store sales in the U.S. stayed flat for the quarter (which turned positive in September).
The company reported earnings per share (EPS) of 52 cents adjusted versus 56 cents expected, and revenue of $9.57 billion, beating expectations of $9.35 billion.
Target is set to report its third-quarter earnings results this week.