The coffee shop giant, making the rounds of investor conferences this week, says it has plenty of capacity to build sales, especially in the afternoons.

Starbucks’ comeback under CEO Brian Niccol is running ahead of schedule, at least according to company executives.

But that doesn’t mean it’s finished.

Niccol, along with Starbucks CFO Cathy Smith, made the rounds of investor conferences this week, arguing that there remains plenty of customers out there to be had for the coffee shop giant.

“There’s still a lot of opportunity for us to grow transactions from where we are today,” Niccol said at the Bernstein Conference on Tuesday. “The reality is, we’re not all the way back to where our transactions were just in 2023, and we’re definitely not back to where we were in 2018 or 2019. So we have capacity to service more demand.”

Indeed, the typical Starbucks location finished the company’s 2025 fiscal year, which ended in September, with 15% fewer customers than it had in 2018, according to an analysis of company filings. The chain’s weakness in 2024 and 2025 erased much of its post-pandemic recovery.

Starbucks’ average-unit volumes, however, are up 31% over that period. Restaurant menu prices over that time are up over 40%. The company has largely generated sales growth through price hikes and by getting customers to buy food or add cold foam, syrups or flavorings to their beverages.

The chain’s average-unit volumes remain below where they were in 2023. So, while the company’s U.S. same-store sales rose 7.1% last quarter and its transactions were up 4.3%, it still has some way to go for a true recovery.

The market today, however, is vastly different from the one that existed back in 2018. 7 Brew, the fast-growing, drive-thru beverage chain, had just opened its first location the year before. Dutch Bros was largely a Pacific Northwest phenomenon with just over 300 locations.

Niccol, however, believes Starbucks has plenty of opportunity to capture more customers. “I believe there is demand out there, both in the morning and the afternoon,” he said.

Driving that increase will be a continuation of much of the chain’s actions to date: Improve speed in the coffee shops, get its different ordering channels in better shape, make those shops more inviting for in-restaurant customers and innovate more on the menu.

Company executives said that the brand changed too much of what made the brand special coming out of the pandemic. “We just drifted away from why people originally fell in love with Starbucks,” Niccol said. “You saw this drift in marketing, this drift in tech, this drift in operations and probably the most visible place where you saw the drift was in the experience when you walk in the stores.”

“We were understaffed and had hardened the restaurants,” he added. “In a lot of cases, we were building soulless experiences.”

Executives believe the afternoon remains the daypart with the most potential, with Niccol noting that “we’ve really just gotten started” on that time.

Seating on its own could help build sales in the afternoons. Starbucks historically has focused on the in-store experience, calling its shops a “third place” even though the bulk of its customers and revenue come from customers who take their drinks with them. But that experience is traditionally more important in the afternoons.

The chain under Niccol has made it a point to return seats to its shops, even in small shops without much lobby space, while baristas write on cups and customers can now get free refills on coffee.

Innovation is another area of focus that executives believe will build sales in the afternoons. The company’s matcha and Refresher platforms have already helped build sales, but Niccol believes the company can squeeze more juice from that lemon.

Starbucks has reduced the time it takes to develop new ingredients for beverages. For instance, he said, it would take 18 months to create a raspberry syrup. That’s now down to eight and the company wants that down to four to speed new products.

It is also adding to its Refresher program, including the option to boost the drinks with energy. The platform, which Starbucks created more than 15 years ago, has become a multi-billion-dollar seller for the brand. And now a bunch of other restaurant chains have introduced their own Refresher platforms.

“Usually, when you create great innovation on big platforms, big things continue to happen, and so that is our mantra,” Niccol said. “We are going to continue to innovate on these iconic platforms that we have.”

Source https://www.restaurantbusinessonline.com/financing/starbucks-says-its-turnaround-ahead-schedule-has-long-way-go