Restaurant Industry Pressures Pinch Near-Term Prospects, but Starbucks Remains a Long-Term Winner

Starbucks is the largest specialty coffee chain in the world, generating $36 billion in sales during fiscal 2023. The firm’s attention to premium-quality coffee distinguishes it from chained competitors, alleviating pressure from quick-service peers and at-home consumption while underpinning substantially higher pricing for what has historically been a commoditized product. This positioning looks increasingly important to us moving forward, as vending, single-serve coffee machines, and quick-service restaurants continue to improve at the lower end of the market, and as China approaches a similarly tiered competitive equilibrium.