Starbucks turnaround gains traction as U.S. traffic grows
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Starbucks' U.S. customer traffic rose for the first time in nearly two years, the company said Wednesday — an early sign its turnaround is gaining traction.
Why it matters: It's a win for CEO Brian Niccol, who was brought in more than 16 months ago to revive slowing U.S. sales by pulling customers back into stores.
The big picture: Starbucks said the number of customer transactions at U.S. stores rose 3% in its most recent quarter — the first increase in eight quarters.
- Sales at locations open at least a year rose 4%.
- The average amount spent per U.S. transaction rose only modestly, underscoring that more visits — not higher prices — fueled the rebound.
State of play: Under its "Back to Starbucks" plan, the company has cut roughly a quarter of its menu, while rolling out new platforms focused on protein, personalized energy drinks and other trend-driven items.
- Executives said newer offerings — including protein drinks — are driving trial, repeat visits and new occasions, especially later in the day.
- "We said from the beginning we wanted to win the morning," Niccol said, pointing to faster service and stronger peak-hour traffic.
Between the lines: Niccol pointed to operational changes — including staffing, faster throughput and simplified menus — as key drivers of shifting customer behavior.
- CFO Cathy Smith said the company is deliberately prioritizing traffic growth before profit recovery. "We have always said that we expect the topline to come first, and then earnings will follow," she said.
- Smith also said higher coffee prices and tariffs weighed on margins in the quarter, even as traffic improved.
The intrigue: Starbucks' approach mirrors Niccol's playbook at Chipotle, which emphasized operational discipline and rebuilding customer traffic before margins.
Zoom out: Traffic is typically the hardest retail metric to reverse for a mature brand built on daily routines.
- Most U.S. locations now open at 5 a.m., and Niccol said store hours could move earlier as service speed improves — a subtle signal of rising demand, particularly in the all-important morning daypart.
What we're watching: Whether simplified menus and new beverage platforms continue to drive incremental visits.
- If Starbucks begins expanding hours as traffic builds — and how quickly that translates into stronger margins.
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