Starbucks (SBUX) investor relations material

Operational turnaround and foundational improvements

• Focused on strengthening operational foundations, including labor investment and customer experience, using the Grow Scorecard to track store performance and feedback.

• Nearly 70% of stores now perform at high operational standards, driving transaction and comp growth, with clarity on improvement areas for the remaining stores.

• Store environment upgrades, such as adding seats and enhancing the coffeehouse experience, have increased afternoon business and overall brand engagement.

• Operational consistency and accountability are emphasized, with best-in-class leadership and ongoing elevation of standards.

• Technology and AI are being deployed to improve back-of-house efficiency, inventory management, and labor productivity, freeing staff to focus on customer service.

Menu innovation and marketing strategy

• Accelerated menu innovation, reducing time to market for new products like syrups from 18 months to four months, and balancing fast-fail approaches with thorough testing for higher-risk items.

• Key growth platforms include Matcha, protein, Cold Foam, and Refreshers, with new launches such as Blue Coconut Refresher and expanded food offerings planned.

• Marketing shifted from discounting to top-of-funnel brand engagement, leveraging cultural moments, social media, and merchandise to drive relevance and frequency.

• Frequent product and promotional news, with new initiatives or launches every two to three weeks, keeps the brand culturally relevant and top-of-mind.

• Enhanced Starbucks Rewards program now offers more flexible redemption, tiered status, and incentives for higher engagement, resulting in increased user participation.

Growth opportunities and competitive positioning

• Significant unit growth potential identified, with at least 5,000 new U.S. stores targeted, especially in under-penetrated central regions, and potential to double international units.

• Store remodels and uplifts are delivering strong transaction growth at lower capital costs, with a goal to reach 8,000 upgraded stores by 2028.

• Afternoon business is a major opportunity, with plans to create a second peak through drinks and food, aiming for parity with the morning peak.

• Competition is viewed as validation of the category's growth; focus remains on executing the brand experience to maintain leadership.

• Supply chain improvements, including daily deliveries and 24-hour replenishment, are expected to unlock further food and afternoon growth.