Starbucks Stock Still Has Huge Opportunity for Growth

Considering it already has 15,000 stores in the U.S., one might that think that Starbucks (SBUX 0.29%) has met the country's demand for it and its coffee. But in this episode of "Ask Us Anything" on Motley Fool Live, recorded on March 18, Fool.com contributors Jason Hall, Jamie Louko, and Matthew Frankel discuss why the chain has room to grow both in the number of its stores nationwide and in the variety of its revenue streams.

Jason Hall: Let's talk very briefly about the growth opportunity that you see for the company in the U.S. I just want to start there on that, and then we're going to rotate over and we're going to spend some time on the Q&A.

Jamie Louko: Yeah. I can go first on this one. For me, with Starbucks, the company has over 15,000 stores in the U.S. But the thing is, a lot of those are in cities or around those urban areas. Quite frankly, they have tons of room to expand into suburbs. Where I live in Maine, I live about 45 minutes away from a big city. In Maine, it's big, not necessarily in terms of the rest of the country. But expanding into those suburbs and moving out into rural areas is a big growth area. I just got my first Starbucks within a 45-minute drive from me just about six months ago in Maine. I live in a city when I go to college in New Hampshire. But expanding into those more rural, more suburban areas and just putting up one location within a 20-minute drive really makes a difference. I know, Dan, maybe you might not be drinking coffee, but if they did something like that, you might be going there more often just because it's a little closer to you and not an hour drive away to spend $6 on a refresher or what have you.

Matt Frankel: I can say to piggyback off that I live in the Columbia, South Carolina, metropolitan area. I know they're planning four new stores in my area, just from talking to the local manager, within the next two years. If you think that 15,000 stores is as big as the U.S. footprint can get, think again. It's also about the per-ticket sales. Starbucks has done a great job of increasing its check averages. It's up 6% over the past year, they figured out. Every time I go into Starbucks, there is some new food item I want to try or my kids want to try, specifically. I can't walk into Starbucks without buying my 6-year-old daughter a cake pop. They know that parents want their coffee. They know they're going to have kids in tow, and they figured out how to monetize that, and that's just one example. But the food offerings have gotten really impressive over the past few years. Few Starbucks do evening hours where they have beer and wine sales. In that respect, it's really not just coffee anymore. There's a lot of little adjacent revenue streams they can pursue. I think that's where the bulk of their domestic growth is going to come from. But there are some new store opportunities as well.