What is traffic and ticket?
In the last section of the series we discussed same-store sales. Same-store sales are a result of customer traffic and average check or the ticket. As the name suggests, an increase in traffic means more customers are visiting stores. An increase in ticket means the average check paid by the customer is higher.
Traffic or customer traffic
Starbucks (SBUX) reported overall customer traffic of 2% in the quarter compared to 7% in the same quarter last year. Breaking down traffic by each segment—China/Asia Pacific traffic grew by 6%, Europe, Middle East, and Africa (or EMEA) traffic grew by 2%, and the Americas traffic grew by 2%. When we compare the same-store sales with the traffic in the above graph, we notice that it moves more or less in conjunction with traffic.
Ticket, or ticket per transaction, increased by 4% in the quarter compared to 1% in the same quarter last year. Breaking down the ticket by segment—the China/Asia Pacific ticket grew by 1%, the EMEA ticket grew by 2%, and the Americas ticket grew by 4%. Ticket has increased sharply due to the roll out of food and pastries that can be offered throughout the day along with beverages. Management stated that it overhauled its breakfast sandwiches. It also upgraded ingredients. Starbucks introduced two new lunch products and two new sandwiches that will help average ticket going forward.
An investor who would like to invest in the restaurant industry as a whole can invest in exchange-traded funds (or ETFs) like the Consumer Discretionary Select Sector SPDR Fund (XLY) and the PowerShares Dynamic Food & Beverage ETF (PBJ).