The Starbucks Slump May Be Coming To An End: How The Coffee Chain Revived Itself

When Brian Niccol took over as Starbucks CEO in September 2024, the world's largest coffee brand was in the middle of a crisis, fighting fires all over the place. From a business standpoint, sales numbers were trending down sparking a 17% crash in share prices in a one-week period. It wasn't just that though. With customers complaining about long wait times and rising prices, their brand was taking a big hit as well. According to Reptrack, which has been tracking brand reputations for over two decades, Starbucks' reputation fell nearly 15 points in a three-year period between 2021 and 2024.

But Niccol, who led a remarkable turnaround at Chipotle before this, seems to have worked his magic again. The new Starbucks CEO made some big changes last year, which are starting to pay dividends. For the first time in eight quarters, Starbucks reported comparable transaction growth in America. Comparable store sales increased 4% domestically, 5% internationally, and 7% in China. The numbers are just rewards for a focused strategy that promised to strip away distractions and focus on their core strengths — serving good coffee and building strong connections across the counter with their customers. What this meant on the ground was enhancing the in-store experience and shifting the marketing message from transactional discounts to highlighting the brand story.

The revival plan was outlined in a document titled "Back To Starbucks." In terms of cutting wait times and improving the in-store experience, one of the big moves is phasing out their mobile order and pick-up stores. While this might seem like a regressive step in a technology-driven world, the logic behind the move was strong. Allowing customers to order on the phone had major repercussions, with Niccol going as far as to say that it was "chipping away at the brand's soul."

First, since there was no control over the rate of orders coming in, the wait times got out of control, with baristas complaining about basic etiquette when placing mobile orders and customers' unrealistic expectations. Second, with baristas forced to churn out order after order, the focus went away from customer interactions. To fix the vibe within stores, the company made some small, but significant changes — bringing back the condiment bar, as well as the tradition of baristas writing customers' names on cups. They're also encouraging customers to bring reusable cups and order their drink "for here" instead of "to go". In addition to this, they've introduced more transparency in pricing, and setting a four-minute wait time target in stores.

"Our Q1 results demonstrate our 'Back to Starbucks' strategy is working and we believe we're ahead of schedule," Niccol said. "It's great to see the sales momentum driven by more customers choosing Starbucks more often, and this is just the beginning."