Back to Starbucks Plan Looks Cogent but Requires Costly Near-Term Investment

Starbucks' business strategy will likely change materially, consistent with new CEO Brian Niccol's "Back to Starbucks" plan. The firm continues to play in a global category of one, with its $36 billion in 2024 revenue outpacing its closest global competitor, Inspire Brands' Dunkin', by a factor of 3 globally and by a factor of 2 in the firm's home US market. Recent strategic missteps, however, have stalled the firm's momentum, with global comparable store sales declining 2% in fiscal 2024 due to consumer price sensitivity, macroeconomic weakness, and a deteriorating value perception. Traffic fell by a brutal 10% in its core North American markets in the fourth quarter of 2024, but the decline narrowed to 4% in the first half of 2025.