Starbucks said Thursday that it plans to open hundreds of new stores across the US and add seating capacity at thousands of existing locations, doubling down on a strategy of emphasizing its cafes as community hubs even as consumer demand for drive-thru coffee grows. The company unveiled its plans during a presentation in New York for investors. After announcing in September that it would close hundreds of less profitable stores, Starbucks said it now expects to open up to 175 new US coffee shops this year and around 400 by 2028, the AP reports.
Its plans include smaller-format stores that are 20% cheaper to build but still offer comfortable seating, drive-thru service, and mobile order pickup capacity.
- CEO Brian Niccol said Starbucks ultimately sees an opportunity to build at least 5,000 new cafes across the US, with the smaller store format presenting much of that opportunity. There are thousands of sites where no Starbucks operates within a mile of a competitor, he said. Starbucks is particularly eyeing the central, southern, and northeastern US.
- In some ways, Starbucks is running counter to a growing US trend of drive-thru-only coffee shops like Dutch Bros and 7 Brew. In September, the National Coffee Association found that 59% of US coffee drinkers who bought coffee outside their home in the past week had used a drive-thru, an all-time high.
- But Niccol said that over the last month, more than 60% of Starbucks' customers came into a store to order, and he thinks it's important for those stores to feel vibrant and inviting. "Our cafes are our point of differentiation," Niccol said. "We want people to be in our coffeehouses."
- Niccol, who joined Starbucks in 2024 to revive flagging sales, said the turnaround is "ahead of schedule," the New York Times reports. He said that at stores that had been open at least a year, sales in the last quarter were up 4% year-on-year, ahead of analysts' predictions. Starbucks has been adding staff and equipment to improve service times and give employees more time to connect with customers, he said.
- Starbucks said it plans to add 25,000 additional seats to its US cafes by this fall as part of an ongoing upgrade intended to make existing stores more welcoming. The improvements, which cost around $150,000 and are done overnight while stores are closed, have been completed at 200 locations and are expected to spread to 1,000 by fall. Starbucks expects to finish the retrofitting work in 2028.
- Starbucks also expects changes to its loyalty program to boost sales. A three-tiered program set to start March 10 in the US and Canada will have various benefits for Green, Gold, and Reserve members. Starbucks has 35.5 million active loyalty members in the US alone. Green members will still earn one star per dollar spent, and stars can be redeemed for food and beverages. But they will earn a $2 credit faster than before and get free drink modifications once per month. Reserve status members, who must earn 2,500 stars in 12 months, gain access to exclusive merchandise and events, including all-expense paid trips to coffee-focused destinations like Milan and Costa Rica. ABC News has more on the loyalty program changes.
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