A look back over 2025 shows Starbucks struggling to regain momentum. Photo credit: Eastman Childs
It has been quite a 2025 for Starbucks. Under the leadership of new CEO Brian Niccol, the world’s largest coffeehouse chain has tried to recalibrate and refocus after several years of falling sales, increased competition, and worker and customer unrest. The company’s stock price fell 24% in the 12 months to July 2024, significantly underperforming the S&P 500.
Niccol took over as CEO in September 2024, and immediately laid out his vision in an open letter: Starbucks had, he wrote, “drifted from [its] core.” Instead of being “a gathering space” that fostered “connection and joy, and of course great coffee,” Starbucks had become “transactional,” Niccol wrote. That would change, he promised, and Starbucks would once again be “a welcoming coffeehouse.”
‘Back to Starbucks’
Niccol’s revival plan dominated the ensuing months. The company simplified its menu, added more comfortable seating, and reduced focus on mobile ordering in a bid to encourage customers to stay awhile. It also said it would phase out its quick-service, pickup-only stores in 2026.
To cut costs, Starbucks laid off corporate workers in two bursts in February and September 2025, the latter of which also included more store closures. The company also switched to flat 2% raises for salaried workers, although executives were promised hefty stock incentives to speed up the turnaround effort. Niccol himself earned more than $97.8 million in 2024, despite only joining Starbucks in September. A report from the AFL-CIO found that he made 6,666 times more than the average Starbucks employee.
So, were all these changes worth it? That’s still unclear. The company’s fourth quarter earnings, released in late October, showed a slight increase in global same-store sales — that is, stores that have been open at least a year — but not in the US, where sales were flat. Niccol was upbeat, telling analysts that the results “marked kind of a turn for us in our US operations.”
Competition and Change in China
Away from the US, Starbucks’ international performance — particularly in China — also came under scrutiny. Although it has enjoyed success in China since opening its first store in 1999, that has changed somewhat in recent years in the face of competition from other international chains as well as low-cost homegrown brands such as Luckin Coffee. Starbucks’ market share in China fell from 34% in 2019 to 14% last year, according to Reuters.
In early November, Starbucks agreed to sell a majority stake in its Chinese business to the Hong Kong-based investment firm Boyu Capital in a deal worth a reported $4 billion. Analysts said the move, which the coffee giant had been mulling for a year, should benefit from Boyu’s local expertise while allowing Starbucks to focus on its US market.
A Union Thorn in Starbucks’ Side
Having started nearly four years ago with a single store in Buffalo, New York, the Starbucks unionization campaign has now reached more than 500 stores and represents over 11,000 workers. Starbucks Workers United (SBWU) has yet to reach an agreement over a union contract, and staged a wide-ranging, open-ended strike last month in an attempt to put pressure on the company.
“Starbucks’ refusal to settle a fair union contract and end union busting is forcing us to take drastic action,” union barista Dachi Spoltore said in a press release. The union has filed more than 1,000 unfair labor practice charges against Starbucks over the past few years, with hundreds still pending. The company said in a statement that it offers the best job in retail, noted that SBWU “represents only 4% of our partners,” and accused the union of walking away from negotiations.