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Restaurants and coffee shops around the world are almost all closed right now. In some countries they are allowed to deliver to homes through businesses like Uber Eats or supply kerbside pick-up service.
We have two investments in this sector. In New York many clients own Starbucks shares and locally some clients still own Famous Brands.
Starbucks was trading very well in the US and China before the Covid-19 disaster. According to a company release on 8 April, the company believes that its business will fully recover later this year. In China over 95% of Starbucks stores have re-opened and new store builds have resumed. Customers can pop in and out, and not linger. A major competitor, Luckin Coffee has crashed after reports of financial reporting irregularities.
Up until a week ago in the US, 44% of company-operated stores were still open, including 76% of all drive-through locations (which total 58% of all company-operated locations, or about 5 825 properties). Additionally, 55% of all licensed stores are open, which are mostly inside grocery stores. The at home coffee sales joint venture with Nestle continues to operate.
Most of the 1 355 locations in France, Italy, Spain, and the UK are closed, but that is only 10% of Starbucks' international store base.
Starbucks is very solid financially and has substantial cash reserves and undrawn credit lines. It also has a well-supported corporate bond programme. In addition, Goldman Sachs notes that they are eligible for about $700 million in benefits from the US government stimulus (bailout) spending CARES act because they employ so many people.
Starbucks has a 41% market share of coffee in the US today, whereas independent stores have a 47% market share. Independent store are in real trouble, and many have laid off their staff permanently. When a slow return to normal trading begins, there will still be many social distancing measures in place, and Starbucks will benefit from their mobile phone "order ahead" system.
You can hold on to your Starbucks shares. The stock closed at $73.51 today.