Starbucks Corporation

Starbucks Corporation, founded in 1971, has grown from a single coffee shop in Seattle to a global chain
of more than 30,000 stores in some 80 markets globally. The world’s largest retailer of specialty coffee,
Starbucks buys, roasts, and sells high-quality coffee beans, as well as handcrafted coffees and teas, fresh
food, and other products through its own stores, licensed shops, grocery stores, and foodservice
channels.

Howard Schultz stepped down as CEO of Starbucks in April 2017, staying on as executive chairman, and
eventually leaving the company in June 2018. Schultz is credited with building Starbucks into a global
enterprise, putting it back on track after the 2008 financial crisis, pioneering its digital strategy, and
involving the company in addressing many social and political issues. Under Schultz, Starbucks was a
leader in offering health care benefits and tuition assistance to part-time employees.

Schultz’s successor is former COO Kevin Johnson, who announced strategic goals in 2017 that included
opening 12,000 locations over the next five years and enhancing digital and mobile operations.
Expanding in China and Japan is another major strategic initiative for the company, despite strong
competition from domestic coffee retailers like Chinese start-up Luckin. On the technology side, the
company unveiled a voice-ordering app and joined with social media outlet Tencent to develop a
Starbucks gift-giving service in China using Tencent’s WeChat mobile messaging app.

The 2020 Coronavirus pandemic caused a double-digit decline in same-store sales and the closure of
many Starbucks cafes. The company responded to the loss of urban commuter and business foot traffic
by bolstering efforts in suburban locations and converting in-store retail to takeout or drive-thrus.
Starbucks reported in October 2020 that customers were returning to its cafes more quickly than
expected, but future corporate strategy will focus on high-margin, high-volume suburban drive-thrus
and expansion in China.

Major developments
2016: Starbucks plans to develop Reserve roasteries—larger stores offering premium food and beverage
products. Company announces agreement with Anheuser-Busch InBev for the brewer to produce,
bottle, and distribute ready-to drink Teavana tea in the US; Starbucks partners with luxury Italian bakery
Princi to manage Princi locations outside of Italy and to sell Princi products in Starbucks stores.

2017: Starbucks launches voice-ordering app; Company closes Evolution Fresh stores; Schultz steps
down as CEO but continues as chairman, is succeeded by Kevin Johnson; Company announces closing of
all 379 Teavana stores as mall traffic declines, will continue to build Teavana brand. Company closes its
online store; Starbucks sells its Tazo tea business to Unilever for $384 million to focus on building its
Teavana tea business.

2018: Starbucks begins organizational restructuring, lays off 5% of corporate workforce. Starbucks closes
all US stores for one day to conduct anti-bias training in response to a racial incident at a Philadelphia
store.

2019: Starbucks announces plans to introduce recyclable, compostable cups. Starbucks revamps loyalty
program, allowing members to earn points more quickly and redeem more products; Company opens its
largest store, 32,000 square feet, in Tokyo.
2020: Starbucks closes some stores, moves to a “walk-thru” to-go model in response to lower store
traffic during COVID-19 pandemic; Starbucks announces plans to open some 22,000 new stores in the
next decade with a focus on high-margin, high-volume suburban drive-thrus; Company believes recovery
from the pandemic will happen next year as customers begin returning to stores;2Starbucks to open 600
new stores in China in 2021.

2021: Starbucks announces Patrick Grismer to retire as CFO, company veteran Rachel Ruggeri to
succeed.

Company Financials

(FY end 9/30)* Total Revenue (US$ millions)

2016 21,316

2017 22,387

2018 24,720

2019 26,509

2020 23,518

1-year growth -11.3%

5-year growth 4.2%

Net Income (US$ millions)

2016 2,818

2017 2,885

2018 4,518

2019 3,599

2020 928

1-year growth -74.2%

5-year growth -19.6%

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