Starbucks to Bring Back Slice Cakes - Analyst Blog

Bloomberg recently reported that Starbucks Corporation SBUX is bringing back the old favorite slice cakes to its U.S. stores in response to consumer demand.

These loaf cakes which were earlier available in banana, pumpkin and iced-lemon were removed from the menu after the coffee chain began rolling out its premium La Boulange baked goods.

Starbucks bought the La Boulange bakery chain in 2012 to enhance its food offerings. According to Bloomberg, some customers complained that the older sliced cakes were better than the fancier, higher-priced pastries available at the U.S. stores. In response to customer demand, slices of banana, pumpkin and iced-lemon loaf cakes will be available at the U.S. stores from this week.

In a bid to diversify, Starbucks is focusing on significant innovation around at-home coffee, refreshment, health and wellness, tea and core food offerings. The La Boulange acquisition revamped Starbucks' food offering — increasing purchases and thereby boosting both traffic and ticket growth at its stores. La Boulange products are now available in more than 3,500 U.S. stores and are expected to be available in all stores by the end of fiscal 2014. Following the success of the bakery products, the company is testing La Boulange lunch items, scheduled to be launched next fall.

Another popular food innovation includes Evolution Harvest line of premium snacks (premium nutritious bars, trail mixes and fruit snacks) available at Starbucks stores as well as Whole Foods Market, Inc. WFM stores. The recently launched breakfast sandwiches, oatmeal and salads have also become popular with customers.

Other Stocks to Consider

Starbucks carries a Zacks Rank #3 (Hold). Better-ranked retail-restaurant stocks worth considering include The Wendy's Company WEN and Jack in the Box Inc. JACK. Both the companies sport a Zacks Rank #1 (Strong Buy).