STARBUCKS CORP

20th century

1970s

Starbucks originally opened in Seattle, Washington, on March 30, 1971. By selling coffee beans and related equipment, Starbucks became a local coffee bean retailer for the first ten years in Seattle. It was founded by business partners Jerry Baldwin, Zev Siegl and Gordon Bowker who first met as students at the University of San Francisco. The trio were inspired to sell high-quality coffee beans and equipment by coffee roasting entrepreneur Alfred Peet. Bowker recalls that a business partner of his, Terry Heckler, thought words beginning with the letters "st" were powerful, leading the founders to create a list of words beginning with "st", hoping to find a brand name. They chose "Starbo", a misreading of the mining town Storbo in the Cascade Range named after Peter Storbo, founder and president of the Mount Rainier Mining Company. From there, the group remembered "Starbuck", the name of the chief mate in the book Moby-Dick. Bowker said, " Moby-Dick didn't have anything to do with Starbucks directly; it was only coincidental that the sound seemed to make sense. "

The first Starbucks store was located in Seattle, at 2000 Western Avenue, from 1971 to 1976. The café was later moved to 1912 Pike Place. During this time, Starbucks stores sold just coffee beans and not drinks. In its first two years of operation, Starbucks purchased green coffee beans from Peet's Coffee & Tea. In 1973, Alfred Peet stopped supplying Starbucks and helped train their new Roastmaster, Jim Reynolds.

1980s

The first Starbucks to sell brewed coffee opened in 1982. Later that year, the company hired Howard Schultz, who was behind the push to begin selling brewed coffee. The company opened its first espresso bar in 1984.

That year, the original owners of Starbucks, led by Jerry Baldwin, purchased Peet's Coffee. By 1986, the company was operating six stores in Seattle and had begun to sell espresso coffee.

Since the founders did not wish to expand too far from their original goal of that centered upon selling arabica coffee beans, Schultz left the company in 1985 to found Il Giornale, a cafe inspired the coffee bars he observed in Milan, Italy. Starbucks was the first investor in this venture, which used its beans in its beverages. In 1987, the original owners sold the Starbucks chain to Schultz, their former director of marketing, who rebranded his Il Giornale coffee outlets as Starbucks and began to expand the company. Also in 1987, Starbucks opened its first locations outside of Seattle, in Waterfront Station in Vancouver, British Columbia, and in Chicago, Illinois.

By 1989, there were 46 Starbucks stores located across the Pacific Northwest and Midwest, and the company was roasting more than 2,000,000 pounds (907,185 kg) of coffee annually.

1990s

In June 1992, at the time of its initial public offering, Starbucks (ticker symbol: SBUX) had 140 outlets, with revenue of US$73.5 million, up from US$1.3 million in 1987. The company's market value was US$271 million by this time. The 12% portion of the company that was sold raised around US$25 million for the company, which enabled it to double its number of stores over the next two years. In 1994, Starbucks acquired The Coffee Connection, gaining the rights to use, make, market, and sell the " Frappuccino " beverage. The beverage was introduced under the Starbucks name in 1995.

In 1999, Starbucks experimented by opening eateries in the San Francisco Bay Area, under the Circadia restaurant brand. At the same time, Starbucks converted its Seattle Circadia restaurant into a Café Starbucks. The same year, Starbucks acquired Pasqua Coffee—a San Francisco -based retail coffee chain that had almost 60 locations in San Francisco, Los Angeles, and New York City.

21st century

2000s

In April 2003, Starbucks acquired Seattle's Best Coffee and Torrefazione Italia from AFC Enterprises for US$72 million. The deal only gained 150 stores for Starbucks, but according to the Seattle Post-Intelligencer, the wholesale business was more significant. By June 2003, Starbucks Japan had 466 stores and would add another 70 to 75 in the 2003 financial year. Its president, Yuji Tsunoda said it would install ovens in all stores to improve its food offerings.

From 2005 to 2007, Howard Behar served as the president of Starbucks North America. In September 2006, rival Diedrich Coffee announced that it would sell most of its company-owned retail stores to Starbucks, including most locations of Oregon-based Coffee People, escalating regional coffee wars. Starbucks converted the Diedrich Coffee and Coffee People locations to Starbucks. The Coffee People locations at Portland International Airport were excluded from the sale.

In early 2008, Starbucks started a community website, My Starbucks Idea, designed to collect suggestions and feedback from customers. Other users could comment and vote on suggestions. Journalist Jack Schofield noted that "My Starbucks seems to be all sweetness and light at the moment, which I don't think is possible without quite a lot of censorship." In March 2008, Starbucks acquired Coffee Equipment Company, which was the manufacturer of the Clover Brewing System. It began testing the "fresh-pressed" coffee system at several Starbucks locations in Seattle, California, New York, and Boston.

In July 2008, during the Great Recession, Starbucks announced it was closing 600 underperforming company-owned stores and cutting U.S. expansion plans amid growing economic uncertainty. On July 29, 2008, Starbucks also cut almost 1,000 non-retail jobs as part of its bid to re-energize the brand and boost its profit. Of the new cuts, 550 of the positions were layoffs and the rest were unfilled jobs. Additionally in July 2008, Starbucks announced that it would close 61 of its 84 stores in Australia in the following month. Nick Wailes, an expert in strategic management of the University of Sydney, said that "Starbucks failed to truly understand Australia's café culture."

In January 2009, Starbucks announced the closure of an additional 300 underperforming stores and the elimination of 7,000 positions. CEO Howard Schultz also announced that he had received board approval to reduce his salary. Altogether, from February 2008 to January 2009, Starbucks terminated an estimated 18,400 U.S. jobs and began closing 977 stores worldwide. In August 2009, Ahold announced closures and rebranding for 43 of its licensed store Starbucks kiosks for their US-based Stop & Shop and Giant supermarkets.

2010s

In 2012, Starbucks had annual Frappuccino sales of over US$2 billion. In August 2012, the largest Starbucks in the US opened at the University of Alabama's Ferguson Centre. On June 25, 2013, Starbucks began to post calorie counts on menus for drinks and pastries in all of its U.S. stores. In July 2013, more than 10% of in-store purchases were made on customers' mobile devices via the Starbucks app.

The company once again utilized the mobile platform when it launched the "Tweet-a-Coffee" promotion in October 2013. On this occasion, the promotion also involved Twitter and customers were able to purchase a US$5 gift card for a friend by entering both "@tweetacoffee" and the friend's handle in a tweet. Research firm Keyhole monitored the progress of the campaign; a December 2013 media article reported that 27,000 people had participated and US$180,000 of purchases had been made to date.

In January 2014, as part of a change in compact direction, Starbucks management transitioned from a singular brand worldwide to focusing on locally relevant design for each store. In May 2014, Starbucks announced ongoing losses in the Australian market, which resulted in all remaining stores being sold to the Withers Group. In July 2017, Starbucks acquired the remaining 50% stake in its Chinese venture from long-term joint venture partners Uni-President Enterprises Corporation (UPEC) and President Chain Store Corporation (PCSC) for US$1.3 billion.

On March 21, 2018, Starbucks announced that it was considering the use of blockchain technology to connect coffee drinkers with coffee farmers who could eventually be able to take advantage of new financial opportunities. The pilot program was planned to start with farmers in Costa Rica, Colombia, and Rwanda in order to develop a new way to track the bean-to-cup journey. In 2019, at the Microsoft Build conference, the coffee company formally announced its "bean to cup" program using the Microsoft's Azure -based blockchain service.

Two men were arrested in a Philadelphia Starbucks location after a manager claimed the two were trespassing on April 12, 2018. The arrests led to protests due to their apparently racially motivated nature. CEO Kevin Johnson later apologized for the incident, and the company declined to press charges. During the company's second quarter earnings call on April 26, Johnson indicated that the company had not seen a drop in sales as a result of the event and subsequent coverage. The company reiterated its guidance for full year earnings, and beat consensus expectations of 1.8 percent same-store sales growth, with 2 percent growth.

Johnson announced that the company would close some 8000 locations on May 29 for a seminar about racial bias in order to prevent future events similar to those that occurred in Philadelphia. On June 19, 2018, Starbucks announced the closing of 150 locations in 2019, three times the number the corporation typically closes in a single year. The closings were to happen in urban areas that already have dense clusters of stores.

In July 2019, Starbucks announced that it would no longer be selling newspapers in its cafés. It was also announced that kiosks for grab-and-go snacks and bags of whole-bean coffee would be removed from stores beginning in September 2019. In November 2019, Starbucks opened its largest store ever on Michigan Avenue, Chicago, with 200 employees.

2020s

On March 20, 2020, due to the COVID-19 pandemic, Starbucks closed all the café-only stores in the United States for two weeks. During that time, only drive-thru and delivery-only services were to function. According to the company representatives, all workers were to be paid for the next 30 days whether they went to work or stayed home. COVID-19 lockdowns caused Starbucks to suffer a general 10% sales decrease, and a 50% decrease in China where quarantine measures were especially strict. In May 2020, the company asked for reduced rent from landlords due to the decrease in sales.

In June 2020, during the COVID-19 pandemic in the United States, the company announced that it would close 400 of its locations in the US/Canada region over the subsequent 18 months as it moves from the coffee house concept to "convenience-led" formats with drive-through and curbside pickup. Starbucks announced that it planned to open 300 stores that would primarily focus on carryout and pickup orders. The new stores would work with the Starbucks mobile app for prepayment by the customer before arrival to pick up the order. The layout of some stores would also be modified with a separate counter for picking up mobile orders. In December 2020, Starbucks announced that it is planning to increase its store count to about 55,000 by 2030, up from roughly 33,000.

Bloomberg reported in July 2022 that the company was, through investment bank Houlihan Lokey, exploring selling its stores in the United Kingdom. In August 2022, after months of suspension due to the Russian invasion of Ukraine, Starbucks sold all its stores in Russia to the Russian rapper Timati. The stores were rebranded as "Stars Coffee", and are very similar to the former stores. Starbucks said it had no comment on the new owner. On October 1, 2022, Howard Schultz stepped down as CEO, with Laxman Narasimhan becoming Starbucks's next CEO.

On March 23, 2023, Narasimhan told employees that he would work a half-day behind a store counter each month, and he trained as a barista to immerse himself in the brand and stay close to customers. In June 2023, Starbucks was ordered to pay $25 million in punitive damages and $600,000 compensatory damages to a former regional manager. The court found that Starbucks fired her in 2018 because she was white. In December 2023, the operator of all of the Starbucks locations in Brazil, SouthRock Capital, declared itself bankrupt. SouthRock would continue to operate Starbucks locations normally while closing a few underperforming ones and would restructure through the bankruptcy procedure. SouthRock Capital later declared Chapter 15 bankruptcy in June 2024.

On August 13, 2024, Starbucks announced it was replacing then CEO Laxman Narasimhan with Brian Niccol. Niccol had served as the CEO of Chipotle since 2018. In January 2025, Starbucks ended its 'open-door policy', and requires customers to make a purchase in order to use restrooms and the seating area. In February 2025, Starbucks cut 30% of its menu in an effort to simplify its processes and reduce costs. The discontinued offerings were primarily less popular or more complex items, including some Frappuccino blended drinks, Royal English Breakfast Latte, and White Hot Chocolate. In July 2025, Starbucks announced corporate office employees would have to return to working physically in the office four days per week, starting in October. For workers who would prefer to instead leave the company, Starbucks would offer a one-time voluntary exit program which would include a cash payment.

In January 2026, Starbucks announced their turnaround strategy which involved forming a joint venture with Boyu Capital to run its business in China, the company’s second-largest market. After the deal closes in the second quarter of fiscal 2026, pending regulatory approval, Boyu will hold up to a 60% interest in the joint venture.

In March 2026, Starbucks announced plans for new regional corporate offices, making a massive expansion by establishing a major corporate hub in Nashville, Tennessee. The company is investing $100 million into this new regional headquarters, which will house up to 2,000 employees over the next five years.

American unionization efforts

Three of the company's stores in Buffalo, New York began an attempt to unionize in August 2021. Using Twitter, the workers announced they had formed an organizing committee, Starbucks Workers United, to form a union affiliated with Workers United. Two more stores joined the effort in September, however these petitions were later withdrawn to ensure a speedy process for the original three locations. During the union drive, the company sent other managers and executives, including its North America retail president, to Buffalo to engage with employees about operational issues and participate in their work. Employees were forced to attend captive audience meetings that contained anti-union messages. Starbucks temporarily closed some area stores for remodeling and added excessive staff to one of the stores preparing to vote. Workers said this reduced union support there, while Starbucks said the support was meant to compensate for increased sick leave during the pandemic as it had done elsewhere in the country. On November 9 Workers United filed three more petitions for elections to represent workers at additional Buffalo area stores. On November 10 the National Labor Relations Board mailed out votes for the elections at the original three locations. Votes for the original three stores were counted on December 9. Days before the vote count, the NLRB rejected arguments by Starbucks to halt the election.

Inspired by their colleagues in Buffalo, workers at a Starbucks store in Mesa, Arizona, petitioned the NLRB for a union election on November 18, 2021, to be represented by Workers United. The organizing at the Mesa location stemmed from, in part, a well-liked manager being terminated after whistle-blowing on Starbucks' anti-union plan.

Starbucks temporarily closed two stores participating in the union drive in October for renovations. The company claimed these closures were unrelated to the unionization efforts. Starbucks began working with Littler Mendelson, a self-described "union-busting firm", in October. Starbucks requested that the National Labor Relations Board include all Buffalo Starbucks locations in the union vote, however, the NLRB rejected this argument and declared store by store elections. Finally, on December 9, 2021, the workers at the Elmwood Avenue store became the first unionized Starbucks workers at a Starbucks owned location in the United States with a 19–8 vote. The Camp Road location voted 12–8 not to be in the union. Starbucks does have unionized locations in other countries. On December 13, workers at two Boston area locations petitioned the NLRB for union elections to be unionize with Workers United. The workers cited the win in Buffalo as inspiration for organizing. Workers in at least one location had most cards signed within a day.

In February 2022, Starbucks fired seven workers in Memphis who had led the unionization effort and temporarily closed the store. In August 2022, the National Labor Relations Board accused the company of illegally discriminating against unionized workers by refusing them wage and benefit increases and requesting restitution. It also asked that the CEO at the time, Howard Schultz, or a board official read a notice about this purportedly unlawful move. That same month, unions were certified at 211 locations in the US. On November 17, 2022, Starbucks’ annual Red Cup Day and one of the busiest days for employees, over 100 locations had employees go on strike. The workers were seeking higher staffing levels, better wages, and consistent schedules.

Most unionization efforts are made through SBWU (Starbucks Workers United). There are over 9,000 American locations, but since the first unionized location in New York in 2021, less than 3% have voted to unionize. SBWU and Starbucks have yet to successfully negotiate a contract. Starbucks claims in a letter and on its website that the Workers United has delayed bargaining, has illegally broadcast bargaining sessions, refused to meet in person, and that Starbucks has reported more than 22 unfair labor practice charges to the NLRB (National Labor Relations Board). By March 2023, the NLRB found no merit in Starbucks's complaints and instead ruled that it was Starbucks who refused to bargain.

On June 23, 2023, Starbucks workers at unionized stores went on strike over the company's stance on in-store LGBT pride decorations.

Economic summary

The key trends for Starbucks are (as at the financial year ending September 28):