Thanks for Visiting!

Register for free to get the full story.

Sign Up
Already have a Placer.ai account? Log In

Starbucks' New Makeover

by 
R.J. Hottovy
 on 
September 26, 2022
Starbucks' New Makeover

Starbucks, the most prolific coffee chain in the country, recently unveiled a dramatic expansion plan. The chain hopes to not only add 2,000 stores to its nearly 16,000-strong fleet by 2025 but to also new implement new strategies in a bid to maximize sales and customer reach by embracing technology. 

We dove into the foot traffic data for the coffee giant to understand what lies behind this decision and whether the opportunity is really there.

Coffee Chain's Continued Confidence

Starbucks was a pandemic winner, with elevated visits throughout much of the period. This was an especially impressive feat for a brand that does see heavy traffic in urban areas and on work commutes - two areas that were hit especially hard by the pandemic. 

As the new year began, the chain did see its visits drop as a combination of Omicron, and inflation kept people from venturing out. Yet, even within this difficult environment, the coffee chain has seen visits above or near pre-pandemic levels throughout the year. And looking at recent visits compared to a January 2019 baseline shows August visits up by 2.6%, an impressive showing considering the economic climate.  

Tapping Into Unfulfilled Demand

And in an effort to maximize the ongoing surge of demand the brand is still seeing, the company is putting a heavy emphasis on driving efficiency. "One of our challenges today is that we're not able to meet the capacity of demand that is coming through our stores," said Brady Brewer, chief marketing officer at Starbucks. Long wait times and lines are one of the culprits keeping potential customers from visiting Starbucks. 

In hopes of addressing the long wait times and improving customer reach, the chain announced that it would be rolling out more of its small-format stores, which cover around 400 sq.ft. compared to a typical Starbucks store's 2,000 sq.ft. 

And there is reason to believe this strategy could help improve efficiency. Looking at a group of small-format locations over the past twelve months (trailing-12 month, or TTM) compared to nearby full-size locations, shows that small format stores saw around 15% more visitors per square meter than the regular locations. These numbers are likely driving the decision to dedicate a significant portion of its expansion plans to ramp up infrastructure for pickup and drive-thru by 2025, unveiling automatic drink machines, and enhancing its in-app ordering capacities to lower bottlenecks at the register. By optimizing store size and focusing on automation, Starbucks should see a more efficient reach in key markets.

Expanding into New Markets

But for a brand that already owns so much of the market, how much expansion potential is there? 

Looking at the data indicates that it could be quite a bit.

Starbucks identified where it was underrepresented on a store per population basis and is planning its expansion in those areas, which are primarily clustered in the Midwest and Southeast. And reviewing Starbucks visits as a percentage of the total restaurant industry revealed that stores in those markets were underperforming Starbucks’s national average of 7.3%. Visits to Louisville, Memphis, and Knoxville Starbucks locations made up roughly 5% of all restaurant visits in those cities. In comparison, Cincinnati and Indianapolis made up 3.2% of all restaurant visits. 

These smaller markets are often the most receptive to new retail investment. Choosing locations in an unsaturated market allows the chain to capitalize on reduced rent and overhead, as well as tapping into unmet consumer demand – a potential driver of sales. 

Things Looking Up For Starbucks

Starbucks has the largest market share of any coffee chain across the country. It hopes to expand its dominance by implementing growth strategies based on data, tapping into unfilled markets, and automating its drink-making processes. 

Will this expansion help Starbucks capture more of the market? Visit placer.ai to find out.

Get 3 brand & industry
breakdowns every week

Subscribe to the newsletter

Great! Prepare your inbox for data-driven insights...
Oops! Something went wrong while submitting the form.

Get a Demo

Please enter your first name
Please enter your last name
Please provide a valid email
Please enter your email
Please enter company name

Thanks for reaching out!

One of our experts will be in touch soon

Try Placer.ai Free
Oops! Something went wrong while submitting the form.
Text Link
Coffee
Text Link
Starbucks
Darden Brands: Location Analytics and Consumer Behavior
Nike and lululemon: a Strong 2023, Sprinting into 2024
Where Is Retail and Dining Foot Traffic Thriving in Early 2024?
Placer.ai White Paper Recap – February 2024
Three Retail & Dining Chains That May Surprise in 2024
Specialty Discount Chains Rock Retail Therapy
Placer.ai Mall Index: February 2024
Placer.ai Office Index: February 2024 Recap
Ulta Beauty Continues To Shine
First Watch Sails Into 2024
Hibbett Sports and DICK’S Sporting Goods: A Psychographic Analysis
Checking in With Discount & Dollar Stores
Peeking Behind The Curtain: Movie Theaters in 2023 and Beyond
Diving Into Brick-and-Mortar Eyewear
Getting Into Gear: Exploring The Auto Part Industry
Recapping Valentine’s Day 2024 Foot Traffic Trends
Fitness: A Strong Start to 2024
Dutch Bros. Continues To Percolate Visits
Super Bowl 2024: Placer.ai’s Postgame Foot Traffic Analysis
CAVA & sweetgreen Are On the Rise
Hats Off For Off-Price
Who Is Shopping at Malls?
Drilling Down Into Home Improvement
Walmart, Target, Costco & Superstore Space 2023 Recap
Catching Up With Shake Shack and Wingstop
Something To Chew On: Demographic Shifts at Steakhouse Chains
Placer.ai Office Index: Looking Back at 2023
Recapping RBI & Yum! Brands’ 2023 Foot Traffic Performance
Placer.ai White Paper Recap – January 2024
Who Shops at Anthropologie and Urban Outfitters?
Three Taco Chains to Watch in 2024
Starbucks and Dunkin’: 2023 in Four Data Points
Who Visits CVS and Walgreens?
Fashionably Frugal: Apparel in 2023
Catching Up With Fast Food
The Grocery Sector in 2023: An End-of-Year Recap
3 Mall & Shopping Center Trends for 2024
Bakery Chains Rising To The Top
Placer.ai and Esri Partner to Deliver Geospatial Analytics
Tampa Tourism Trends
Going For The Green: The Changing Dynamics Of Country Clubs
Christmas Day Dining Recap
Major Urban Shopping Districts – Holiday Season Recap
Placer.ai Office Index: December 2023 Recap
Recapping the 2023 Holiday Shopping Season
Placer.ai White Paper Recap – December 2023
7 Retail & Dining Segments to Watch in 2024
Diving Into Holiday Season Favorites
Super Saturday and Christmas Eve Eve: A Winning Combination
3 Budget Grocery Chains Finishing 2023 On a High Note
Making It In America: International Chicken Chains Bring The Heat
Domestic Tourism at a Glance: A Q3 2023 Roundup
Five Pizza Chains On The Rise
Jewelry Brands Taking Advantage of the DTC Opportunity
Secondhand News: Kids' Thrift Shops
Recapping 2023’s Dining M&As
MetLife Stadium Kicks Off Football Season
Placer.ai Office Index: November 2023 Recap
Small Coffee Chains Brewing Big Success
Placer.ai White Paper Recap – November 2023
Thanksgiving Travel 2023 Recap
Checking in With Nike and Lululemon
Black Friday 2023 Retail Recap
Starbucks’ 2023 Holiday Menu & Red Cup Day Performance
Turkey Wednesday 2023
Who Attended the 2023 Pickleball Championship? 
Three Surprising Holiday Shopping Trends
What’s in Store for Ulta Beauty This Holiday Season?
Best Buy and Department Stores: A Holiday Deep Dive
Discount & Dollar Stores: Strength Toward The End of the Year
The State of Off-Price Retail: Discounts Seal The Deal
Placer Mall Index Recap: October 2023
Placer.ai Office Index: October 2023 Recap
Retail Corridors Ahead of the 2023 Holiday Season
California, Here Gap Comes
Checking in With Home Improvement
Getting Into the Glasses Game: Warby Parker Takes Over
Fitness Positioned for a Strong 2023 Finish
White Paper Recap: October 2023
Coffee Giants Brewing Up Business
Popeyes and Burger King Lead the Way
Diving into Yum!
Looking Ahead to Black Friday 2023
Blockbusters Drive Movie Theater Comeback
Crocs and Boot Barn: Shoe-Ins for Success
McDonald’s and Chipotle's Winning Recipe
The State Of Steak: Checking in With Texas Roadhouse
Pleasant Pastimes: Pickleball Potential Proves Potent
Who’s Driving Downtown Manhattan’s Weekend Revival?
Diving into Downtown Manhattan Foot Traffic Trends
Rite Aid: Rightsizing Right
Major League Soccer: Its Die-Hard and Casual Fans
The Anchor Recap: September 2023
Placer.ai Office Index: September 2023 Recap
Placer Mall Index Recap: September 2023
September White Paper Recap
The Consumer Habits of College Students
JCPenney: Rightsizing and Revitalizing
Pent-Up Demand Ahead of October Sales Events
4 Strategies Retailers are Using to Drive Traffic to Their Venues