Starbucks has revealed ambitious expansion plans for the United States, targeting the opening of hundreds of new stores and significantly increasing seating capacity at thousands of existing locations. The announcement was made during an investor presentation in New York, where the company detailed its strategy to reinforce its cafes as community hubs, even as consumer preference for drive-thru coffee services continues to rise.
Expansion and Store Format Innovations
Following the closure of hundreds of less profitable stores in September, Starbucks now expects to open up to 175 new coffee shops in the US this year and approximately 400 in 2028. A key component of this expansion is the introduction of smaller-format stores, which are projected to be 20% cheaper to construct while still offering comfortable seating, drive-thru service, and mobile order pickup options.
Chairman and CEO Brian Niccol emphasised the long-term vision, stating that Starbucks sees an opportunity to build at least 5,000 new cafes across the US, with the smaller store format playing a crucial role. He highlighted that there are thousands of potential sites where no Starbucks operates within a mile of a competitor, particularly targeting the central, southern, and northeastern regions of the country for development.
Countering Drive-Thru Trends with Enhanced In-Store Experience
In a move that contrasts with the growing trend of drive-thru-only coffee shops like Dutch Bros and 7 Brew, Starbucks is doubling down on its in-store experience. Niccol noted that over the last month, more than 60% of Starbucks customers visited a store to place their orders, underscoring the importance of creating vibrant and inviting environments.
"Our cafes are our point of differentiation," Niccol asserted. "We want people to be in our coffeehouses." To support this, the company plans to add 25,000 additional seats to its US cafes by the end of its fiscal year this autumn, as part of an ongoing upgrade initiative aimed at making stores warmer and more welcoming.
These improvements, which cost around $150,000 per location and are conducted overnight while stores are closed, have already been completed at 200 sites. Starbucks expects to extend these renovations to 1,000 stores by the autumn and complete the retrofitting work by 2028. The company operates approximately 10,000 company-owned stores in the US, and Niccol reported that customers are spending more time in revamped locations.
Operational and Product Enhancements
Since joining Starbucks in 2024 to revitalise flagging sales, Niccol has overseen a turnaround that includes adding staff and equipment to improve service times and foster better customer connections. Among the priorities for the coming year is boosting afternoon business, which has historically been weaker than morning performance.
To address this, Starbucks plans to launch customizable energy drinks made with a proprietary green coffee extract in the spring, alongside more snackable foods high in protein and fibre, such as flatbreads, cottage cheese, and protein popcorn. Additionally, the company is introducing next-generation espresso machines that will halve the current 70-second shot-pulling time and double capacity to eight shots simultaneously, with rollout to US stores beginning in 2027.
Loyalty Program Revamp and Financial Outlook
Starbucks also anticipates that changes to its loyalty program will drive sales growth. A new three-tiered program, set to launch on March 10 in the US and Canada, will offer various benefits for Green, Gold, and Reserve members. With 35.5 million active loyalty members in the US alone, the program aims to enhance customer engagement.
Green members will continue to earn one star per dollar spent, redeemable for food and beverages, but will now earn a $2 credit more quickly and receive free drink modifications once per month. Higher-tier members, particularly Reserve status holders who earn 2,500 stars in 12 months, will gain access to exclusive merchandise and events, including all-expense-paid trips to coffee destinations like Milan and Costa Rica.
Financially, Starbucks reported stronger-than-expected sales in its fiscal first quarter, with same-store sales up 4% globally and in the US during the October-December period, marking its best US performance in two years. The company forecasts global and US same-store sales to rise 3% in its 2026 fiscal year and has provided guidance for 2028, expecting similar sales growth of 3% or more, revenue growth of 5%, and earnings per share between $3.35 and $4, compared to adjusted earnings per share of $2.13 in fiscal 2025. Despite this positive outlook, Starbucks shares fell 1% in midday trading on Thursday.
