Starbucks claims the decision to “overhaul” its marketing is driving stronger customer perception scores and market share growth.
Speaking yesterday (29 October) on the publication of the firm’s full year results, CEO Brian Niccol described the fourth quarter as a “milestone” in the coffee chain’s turnaround, as the business delivered global comparative growth for the first time in seven quarters.
Starbucks claims the decision to “overhaul” its marketing is driving stronger customer perception scores and market share growth.
Speaking yesterday (29 October) on the publication of the firm’s full year results, CEO Brian Niccol described the fourth quarter as a “milestone” in the coffee chain’s turnaround, as the business delivered global comparative growth for the first time in seven quarters.
He claimed the ‘Back to Starbucks’ strategy, introduced in September 2024 to bring the business back to its “community coffeehouse” roots, is paying off.
“Our measure for brand affinity accelerated in the quarter, reaching its highest point since 2023 and Starbucks Corporation’s ranking as customers’ first choice was a five-year record high,” Niccol told investors.
“We saw the biggest gains in service time, connection and care perception, demonstrating the power of Green Apron service. Non-Starbucks Rewards customer transactions grew year-over-year for the second consecutive quarter across all dayparts, validating our approach to marketing.”
We always are keeping an eye on our value proposition. As we think about pricing going forward, we’re going to be very strategic, very targeted with when we use it.
Brian Niccol, Starbucks
Starbucks describes its Green Apron service as its “biggest investment” in operating standards and customer service, the ambition being to become “the world’s best customer service company”.
According to the CEO, the customer service push has strengthened value perceptions, alongside “proactive moves” to bring back the condiment bar, “simplify” the pricing architecture and remove the extra charge for non-dairy milks.
“We know our value equation extends beyond pricing and when we provide great customer service, alongside handcrafted, personalised beverages made with high-quality ingredients, we provide unmatched value to our customers,” he added.
The company explained its growth agenda extends “well beyond North America”. In the fourth quarter, Starbucks’ international business reached record revenues of $2.1bn (£1.6bn), ending the year with an “all-time high” of $7.8bn (£5.9bn).
Net revenues for the North America business rose 3% in the fourth quarter to $6.9bn (£5.2bn), with fourth quarter consolidated revenue sitting at $9.6bn (£7.2bn), up 5% on the prior year.
Looking at the year to 28 September, the business notched up a total of $37,184bn (£27,890bn) in net revenue, up 2.8% on the previous year, although operating income fell 45.7% to $2,937bn (£2,203bn)
The chain opened 316 net new coffee houses in the fourth quarter, from a total of more than 900 in the 2025 financial year. However, Starbucks is in cost cutting mode, announcing last month it would close loss making locations in the UK and US, and cut 900 non-retail roles.
Niccol confirmed the intention is to “dramatically simplify store level reporting” from nearly two dozen metrics to five KPIs that best correlate with comparative growth.
Eye on value
The Back to Starbucks strategy directly relates to the “definition of the brand”, which is centred on customer connection and craft, said Niccol. He claimed where Starbucks had gone most “off brand” in the past was in the way it handled mobile orders in its cafés.
“Back to Starbucks is a reference around the whole brand proposition and it gets us centered on providing a great customer service experience, which separates this brand from everybody else. The foundation is this customer connection,” said the CEO.
The strategy includes investing in innovation. Niccol pointed to the introduction of new cold foam and latte protein drinks as the start of “disciplined stage-gated innovation” across the Starbucks menu. The protein range is credited with building customer awareness and attracting less frequent customers, as well as delivering “incremental” potential.
The chain’s 90-day active Starbucks Rewards member base grew 1% year-on-year to 34.2 million people, led by higher re-engagement, and customers opting for both seasonal products and new offerings. According to Niccol, the chain’s “intentional shift away” from last year’s discounting drove a healthier mix of non-discounted sales.
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For Starbucks, its growth is closely connected to improving value perceptions. The business tracks its value rating scores and is ready to use the “lever of pricing”.
“We always are keeping an eye on our value proposition. As we think about pricing going forward, we’re going to be very strategic, very targeted with when we use it,” said Niccol. “I don’t envision us just doing broad scale pricing across our menu.”
The Starbucks CEO claimed the festive season will be “iconic”, with investment going into new ads and merchandise to promote the chain’s gifting products.
“As I reflect on fiscal 2025, we did important work to rebuild our core, strengthen our foundation and we’re entering fiscal 2026 on stronger footing. Looking to Q1, the holiday season is a cherished moment for our customers and for our business. It’s the first time we’re bringing all our work together,” said Niccol.
Next year the business is plotting “improvements” to the rewards programme and mobile app. There will also be “new brand activations” and the opening of more experiential flagship coffee houses in the mould of its new site in Real Madrid’s Santiago Bernabéu Stadium.
In September, Starbucks also inked a partnership to become the official coffee partner of the LA28 Olympic and Paralympic Games, and Team USA.
“We set a plan. We’re working the plan. The plan is working. We have more work to do, but we’re building momentum,” added Niccol. “Regardless of the headwinds and tailwinds we may encounter, I’m confident we have the right team and strategy to deliver long-term sustainable growth.”