Starbucks reports 4% drop in Q1 sales amid ‘Back to Starbucks’ strategy rollout 

USA – Global coffeehouse chain Starbucks has reported a 4 percent decline in global comparable store sales for its first-quarter fiscal year 2025 results, as the company continues implementing its “Back to Starbucks” strategy to streamline operations and enhance customer experience. 

The decline in sales was primarily driven by a 6 percent drop in comparable transactions, partially offset by a 3 percent increase in the average ticket size.  

In North America, comparable store sales also fell by 4 percent, reflecting an 8 percent decline in transactions, which was somewhat mitigated by a 4 percent increase in average ticket value. 

International markets followed a similar trend, with comparable store sales down 4 percent due to a 2 percent drop in both transactions and ticket size.  

In China, Starbucks’ second-largest market, sales declined by 6 percent, driven by a 4 percent decrease in ticket value and a 2 percent decline in transactions. 

Despite the sales downturn, Starbucks Chairman and CEO Brian Niccol expressed confidence in the company’s turnaround efforts.  

“While we’re only one quarter into our turnaround, we’re moving quickly to act on the ‘Back to Starbucks’ efforts, and we’ve seen a positive response,” Niccol stated.  

“We believe this is the fundamental change in strategy needed to solve our underlying issues, restore confidence in our brand, and return the business to sustainable, long-term growth.” 

During the quarter, Starbucks expanded its global footprint by opening 377 net new stores, bringing its total to 40,576 locations. Of these, 53 percent are company-operated, while 47 percent are licensed.  

The U.S. and China remain Starbucks’ largest markets, accounting for 61 percent of the company’s global portfolio, with 17,049 and 7,685 stores, respectively. 

Starbucks’ consolidated net revenues remained steady at US$9.4 billion compared to the previous year.  

International segment revenues saw a modest 1 percent increase, reaching US$1.9 billion, driven by a 9 percent growth in company-operated stores over the past year and additional revenue from the acquisition of a U.K. licensed business partner.  

As part of its restructuring, Starbucks announced plans to streamline its menu, cutting approximately 30 percent of its offerings by the end of fiscal year 2025. The move is aimed at simplifying operations and improving service speed.  

Additionally, the company will test a “capacity-based time slot model” for mobile ordering, allowing customers to schedule their orders. 

Niccol also noted that customer-focused changes, such as writing messages on cups and bags and eliminating non-dairy milk surcharges, have contributed to increased store traffic. 

Meanwhile, Starbucks has introduced a new code of conduct, permitting individuals to use store spaces and restrooms without making a purchase.  

The policy follows a 2018 incident in which two Black men were arrested in a Philadelphia Starbucks for not buying anything, sparking a national debate on racial bias in retail spaces. 

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