David Palmer: Thanks and congratulations, Howard. Two big picture questions that often come up with long-term investors. I don’t know if this is quite the forum, but maybe a quick comment on each. One would be how you’re thinking about the brand and how it would do in a recession? Should we have one? Why would go perhaps better than 2007 and 2008. And then secondly, I think we can all agree that Zero COVID is the biggest factor with China. But any sort of metrics that make you feel confident that the brand would have a full recovery, people ask about competition in China? And any sort of metrics around brand scores or anything that gives you confidence that you’ll have a full recovery would be helpful. Thanks.
Howard Schultz: David, thank you. Belinda is on the call, and she’s sitting, I believe, in Shanghai, and I think she’d be best suited to answer your question regarding China recovery, the situation that she’s seeing on the ground. So Belinda, can you respond to that first. And then Brady will talk about the brand.
Belinda Wong: Yes. Thank you, Howard. Hi, thank you for the question. Starbucks brand relevance remains as strong as ever, and we’re best positioned to capture the growth opportunities ahead. Our latest brand tracker shows Starbucks remains Chinese customers’ first choice in the away-from-home coffee category. Also, Starbucks is the brand leader in terms of brand affinity, visitation and frequency. And despite all the COVID disruptions we faced in Q1, our customer connection score also reached another record high in Q1. So our strong operating muscle and the strong relationships that we have with our customers and our partners and the strength of our brand, really, we are best positioned and so ready to recover and accelerate the growth of our business.
And I would say that there’s no other competitor that can match the competitive advantages that we have, the quality of our coffee, our brand strength, our connection, our unique third place and our omnichannel capabilities, our national footprint and the digital ecosystem and supply chain excellence that we have built. Thank you.
Howard Schultz: Brady, do you want to go to brand?
Brady Brewer: Yes. As we think about weathering a recession in the U.S., it really comes down to two words for us, and that is momentum and innovation. And I’d say that when I say momentum, it’s about relevance and resilience. And as we think about relevance, if we look at the last quarter, we have more customers in total population than ever in the U.S. They’re very highly engaged. If we look at share of wallet and spend, 56% of our transactions were from our reward members. And just as Belinda said, in China, our U.S. customers see Starbucks as their first choice for coffee with leading affinities. So from a brand standpoint, we’re in a very strong position. When we look at resilience, last quarter, we saw not only ticket growth but transaction growth, even in the face of the macroeconomic headwinds.
So in terms of momentum, we see that carrying into the quarter ahead and the year ahead. And then I’d say innovation, as I mentioned, so product, we see continued strength in our future innovation road map and our existing strategy around cold, customized and plant-based beverages, and it comes down to beverages that customers love that they truly can only find at Starbucks. And that was true throughout the pandemic, and it’s true right now. With digital, our digital platforms have been very sticky with customers. And we’re just making those better as you look at things like Odyssey and Reward together. And then earlier in the presentation, Rachel shared about equipment, it’s just making the job more efficient for our partners, unlocking even greater quality and more customization.
So if you take that momentum and that innovation, it just reinforces that we’re a very strong brand right now, looking ahead, despite any economic headwinds, we’re still poised for growth.
