After five consecutive quarters of declining sales that threatened to tarnish one of America’s most iconic brands, Starbucks Corporation has finally turned a corner. Under the leadership of CEO Brian Niccol, the coffee giant has posted two consecutive quarters of growth, driven by a back-to-basics strategy that emphasizes customer service, store experience, and operational excellence over aggressive expansion and digital gimmicks.

In a wide-ranging interview with Bloomberg Television’s Romaine Bostick on “Bloomberg Open Interest,” Niccol laid out the blueprint for Starbucks’ resurgence—a blueprint that prioritizes human connection over automation, quality over quantity, and sustainable growth over short-term gains. The results speak for themselves: transaction growth has returned, market share is expanding, and investor confidence is rebounding after years of uncertainty.

“It was a great quarter for us,” Niccol told Bloomberg. “The thing that was really exciting to see the growth was driven by transactions and also the fact that the initiatives that we put in place around operating, supporting our partners with the Green Apron service model and really getting back to great customer service, I think really showed up in the results this last quarter.”

The Transaction-Driven Recovery: More Customers, More Visits

The most encouraging aspect of Starbucks’ recent performance isn’t just that sales are growing—it’s how they’re growing. Unlike previous periods when the company relied heavily on price increases to boost revenue, the current growth is being driven by something far more sustainable: more customers visiting more frequently.

“We saw about a little less than a point of ticket growth,” Niccol explained, noting that transaction growth significantly outpaced average ticket increases. This reversal represents a fundamental shift in the company’s trajectory. For quarters, Starbucks had been losing occasional customers—those who weren’t part of the loyalty program and who had drifted away as the brand struggled with operational challenges and increased competition.

Now, both loyalty members and non-members are returning. “The growth in transactions came from existing customers that are in our rewards program as well as customers that are not in our rewards program, that frankly, we had been struggling to kind of reclaim momentum with that group,” Niccol said. “In this quarter, we had both groups growing in visits and as a result, our market share increased in visitation as well.”

The Coffeehouse Experience: Why Physical Stores Still Matter

In an era when delivery apps and mobile ordering dominate the quick-service restaurant industry, Niccol’s emphasis on the in-store experience might seem counterintuitive. After all, drive-thru, mobile ordering, and delivery now account for the vast majority of Starbucks transactions. Yet the CEO remains adamant that the physical coffeehouse is central to the brand’s identity and long-term success.

“Starbucks is defined by the cafe and the coffeehouse experience,” Niccol insisted. “That really is where you get the human to human connection with our baristas. It’s where you see the craft of Starbucks, and then you also get just the soul of Starbucks.” This isn’t merely nostalgic thinking—it’s strategic. According to Niccol, 60% of Starbucks customers made at least one purchase from the counter in the most recent month measured, demonstrating that even frequent mobile and drive-thru users still value the in-store experience.

The company is investing heavily in what it calls its “coffeehouse uplift program,” essentially retouching and reimagining stores across its network. “We will have great seats, great atmosphere, a place that feels warm, a place you want to be,” Niccol said. This investment comes at a time when new competitors like Luckin Coffee are taking a radically different approach—emphasizing grab-and-go convenience over ambiance and experience.

Competing on Multiple Fronts: The Omnichannel Challenge

Niccol’s vision for Starbucks isn’t about choosing between the coffeehouse experience and digital convenience—it’s about excelling at both simultaneously. This omnichannel approach is complex, requiring sophisticated operations and technology to ensure that a customer can receive the same quality experience whether they’re sitting in a carefully designed cafe, picking up a mobile order, or going through the drive-thru.

“We know how to operate and give great experiences in all access modes,” Niccol said, noting that Starbucks’ drive-thru business alone generates over $10 billion in annual revenue—enough to be a Fortune 500 company on its own. The key to managing this complexity, according to the CEO, is the company’s Green Apron service model, which focuses on having the right number of employees properly deployed and trained.

The results of this operational focus are measurable: cafe experiences now happen in less than four minutes from order to drink with a personal handoff, mobile orders are more accurate and on-time than ever before, and drive-thru times during peak periods are below four minutes. “It can be done, but we have to be intentional about it and we have to set our partners up to be successful to operate that omni channel experience,” Niccol explained.

Cultural Relevancy and Marketing Innovation

Beyond operational improvements, Starbucks is working to reclaim its position as a cultural icon. Under Chief Marketing Officer Tressie Lieberman, the company has refocused its marketing efforts on cultural relevance—showing up “in the right places at the right time with the right communication,” as Niccol put it.

“One of things we set out to do as part of this turnaround is get back into culture, get back to leading culture,” the CEO said. “You got to do that with the right drinks, the right food, and then, frankly, the right representation of the brand.” This cultural push is already showing results, with Starbucks generating more conversation and engagement among consumers.

The company’s revamped rewards program, launching in early March, is a key component of this strategy. The new three-tier system—Green, Gold, and Reserve—is designed to be more personalized and accessible. “The feedback we got was it’s not very personalized,” Niccol acknowledged of the old program. The new Green tier allows customers to redeem rewards with less frequent engagement, addressing a common complaint that the program only benefited heavy users.

Growth Expectations and Financial Targets

While investors have been pleased with Starbucks’ recent performance, some analysts question whether the company can return to the mid-single-digit or even double-digit growth rates it enjoyed during its heyday. Niccol’s response is measured but confident: at Starbucks’ current scale—40,000 coffeehouses worldwide and over 400,000 employees—consistent comparable store sales growth of 3% or better, revenue growth of 5% or better, and earnings growth that outpaces revenue would be “world class.”

“We are a growth company at scale, which is really exciting,” Niccol said. The company is guiding toward operating margins of 13% to 15% by 2028, with potential for further expansion beyond that milestone. To achieve these targets, Starbucks plans to extract close to $2 billion in costs over the next two years while simultaneously growing the top line.

The path to improved profitability involves both revenue growth and operational efficiency. After investing $500 million to $600 million in labor to improve the partner experience, the company is now focused on driving sales growth and managing costs intelligently. “It’s a combination of growth and smart cost management,” Niccol explained.

Pricing Strategy in an Uncertain Economy

One of the most delicate aspects of Starbucks’ turnaround involves pricing. The company’s products are perceived as premium-priced, which could be a vulnerability in an economic downturn. However, Niccol is betting that if the experience justifies the price, customers will continue to see value in the offering.

“The thing that I’m excited about is people are saying the experience they’re getting at Starbucks, the whole package, they’re saying it’s worth it,” the CEO said, noting that the company is seeing some of its highest scores in consumer satisfaction surveys. Importantly, Starbucks has held off on price increases for more than a year, relying instead on volume growth and operational improvements.

“Pricing is one of those things that will always be the last lever that will pull,” Niccol said. “If we need to do it, we’ll do it very strategically and we’ll try to do it as minimal as possible.” This pricing discipline stands in contrast to the company’s previous strategy, which relied more heavily on regular price increases to drive revenue growth.

The Labor Equation: Investing in Partners

Central to Starbucks’ operational improvements is its investment in employees—or “partners,” in company parlance. The company has positioned itself as offering some of the best wages and benefits in retail, a strategy that has resulted in employee turnover below 50% at the hourly level, compared to an industry average exceeding 125%.

“We have one of the best jobs in retail,” Niccol said. “The feedback I’m getting from our partners is they definitely feel supported, they’re engaged and they love doing the work that they’re doing.” This investment in labor is substantial and ongoing, but Niccol argues it’s essential to delivering the consistent experience that drives customer loyalty.

The unionization efforts that began before Niccol’s tenure remain an ongoing challenge. While the CEO expressed openness to reaching an agreement with union representatives, he emphasized that any contract would need to be “reasonable” and “sustainable” for all 400,000 partners globally. “I’d love to be able to find a deal so that we could get a contract and move on,” Niccol said. “But it’s going to have to be reasonable and it’s going to have to reflect the fact that we are the leader in benefits, wages for people that work 20 hours or more in our company.”

The China Question: Partnership and Growth

Perhaps the most significant strategic shift under Niccol’s leadership is the company’s approach to China. Starbucks recently entered into a partnership with private equity firm Boyu Capital, effectively selling a majority stake in its China operations. This move represents a fundamental rethinking of how the company will pursue growth in what remains one of its most important markets.

“We do believe China is a tremendous growth market,” Niccol said, noting that the company currently operates over 8,000 coffeehouses in China and believes that number could reach 15,000 to 20,000 with the right partner. The decision to bring in Boyu was driven by the recognition that rapid local competition requires local expertise and relationships.

“For our next chapter of growth, we just believe we needed a local partner to help us figure out how we can grow faster,” the CEO explained. The coffee category in China has exploded in recent years, with competitors ramping up new unit growth at a pace Starbucks couldn’t match on its own. The partnership with Boyu is designed to accelerate Starbucks’ expansion while maintaining the quality and experience that differentiates the brand.

Asset-Light International Expansion

The China partnership is part of a broader strategic shift toward asset-light growth in international markets. Rather than deploying capital directly into new stores, Starbucks is increasingly working with local partners who handle the capital investment while Starbucks provides support in marketing, menu development, technology, and design.

“In most cases you see the margin actually rise and becomes margin accretive to the total business,” Niccol said of this approach. Beyond the financial benefits, local partnerships provide access to premier real estate and enable faster expansion than would be possible from Starbucks’ Seattle headquarters. This strategy allows the company to maintain its global presence and brand standards while reducing capital requirements and financial risk.

The asset-light model also addresses concerns about Starbucks becoming overextended. Under previous leadership, the company pursued aggressive expansion that sometimes resulted in cannibalization—multiple Starbucks locations competing against each other in close proximity. Niccol’s approach is more measured, focusing on strategic placement and sustainable growth.

Domestic Expansion: Room to Grow

Despite already having a massive presence in the United States, Niccol sees significant room for domestic expansion. The company has identified opportunities for 5,000 additional stores, with potential for even more as it grows its afternoon daypart and improves unit economics.

“We want to be smart about where we locate them so that it’s the right place for the customer, most importantly, and then also so that we can attract and retain partners to have a great experience working in the stores,” Niccol said. This disciplined approach to expansion contrasts with the more aggressive strategies of the past, which sometimes prioritized speed over strategic fit.

The focus on the afternoon daypart represents a significant opportunity. While Starbucks dominates the morning coffee occasion, the afternoon remains underdeveloped. “We have an afternoon business today, but I think there is a multibillion dollar opportunity to grow our afternoon daypart,” Niccol said. The company is developing beverages and food items specifically designed for afternoon consumption, including both caffeinated and non-caffeinated options.

Menu Innovation: Personalization and Customization

Menu innovation is central to Starbucks’ growth strategy, particularly for capturing afternoon occasions. The company recently launched a protein cold foam option that can be added to any drink—a modification that has proven popular and drives transaction growth without significantly increasing ticket size.

Looking ahead, Starbucks is developing what it calls an “energy refresh platform” that will allow customers to customize caffeine levels from completely decaffeinated to higher-than-standard caffeine content. “We want to have the right drinks for you, whether it’s morning or afternoon,” Niccol explained. “In the afternoon, some people in certain cases aren’t looking for caffeine. In other cases, they’re actually looking for more caffeine. So we need to be able to provide it all.”

Food innovation is equally important, with the company focusing on protein-forward and fiber-rich options that align with current health and wellness trends. “The thing that I love about Starbucks is personalization. Customization is at the core of who we are and what we do,” Niccol said. This emphasis on customization differentiates Starbucks from competitors who offer more limited menus focused on speed and efficiency.

Lessons from Previous Turnarounds

Niccol’s track record speaks for itself. As a former brand manager at Procter & Gamble, he later led successful turnarounds at both Taco Bell and Chipotle before taking the helm at Starbucks. His approach at each company has emphasized returning to core brand values, improving operational excellence, and creating experiences that resonate with customers.

At Starbucks, Niccol’s philosophy is straightforward: “We don’t need to change who we are. We just need to be great at who we are and what we do.” This back-to-basics approach has resonated with both employees and customers. Rather than chasing trends or attempting radical reinvention, Niccol has focused on executing the fundamentals exceptionally well.

The scale of Starbucks—40,000 locations, 400,000 employees, operations in dozens of countries—presents unique challenges that Niccol hadn’t faced at Taco Bell or Chipotle. Yet the CEO remains confident that the same principles apply. “The brand is beloved. It’s iconic,” he said. “When you go around the world, there’s no doubt that people want to engage with the Starbucks brand.”

Looking Ahead: Sustainable Growth and Market Leadership

As Starbucks moves forward, the company faces both opportunities and challenges. Competition in the coffee category continues to intensify, with well-funded startups and established players alike vying for market share. Economic uncertainty could pressure consumer spending on discretionary items like premium coffee. And operational complexity will only increase as the company expands its omnichannel capabilities.

Yet Niccol’s message is one of confidence grounded in execution. By focusing on the fundamentals—great coffee, exceptional service, inviting spaces, and operational excellence—Starbucks is reclaiming its position as the category leader. The recent quarters of growth suggest that this strategy is working, but the real test will be whether the company can sustain this momentum over years, not quarters.

“I’m really optimistic about what we can do,” Niccol said, summarizing his vision for the company. That optimism is increasingly shared by investors, employees, and customers who have watched Starbucks stumble in recent years. If the company can continue executing on Niccol’s blueprint, the coffee giant may be entering a new era of growth and cultural relevance—proving that even iconic brands can rediscover their magic when they remember what made them special in the first place.