Steph Kronos (L), a pro-Union activist, joins Starbucks workers, on strike outside of a Starbucks … [+]
AFP via Getty ImagesNo two ways about it, Starbucks is a great brand. Yet like so many other great brands, it’s had its ups and downs over the years, but it’s been mostly downs recently.
In 2024, Starbucks dropped a few notches in Interbrand’s top 100 global brand ranking, from 48 in 2023 to 52. However, it plunged from number 15 to number 45 in the Brand Finance report of the most valuable global brands, the greatest decline of any brand among its top 100.
Starbucks 2024 year-end results didn’t help. While it reported basically flat revenues at $36.2 billion, global comparable store sales declined by 2% due to weakening store patronage. In the first quarter 2025, the decline in comparable store sales picked up pace dropping 4%, with comparable transactions down 6%, and in the U.S., comparable transaction volume was off even more, down 8%.
Net/Net: Starbucks is losing as the place where people want to hang out or grab a cup of coffee for their caffeine fix. It’s lost customers’ goodwill so they don’t feel the pull toward Starbucks that they once did.
While it shows up to a certain extent in the company’s financial reporting, consumers’ feelings toward the Starbucks brand is best measured in its brand reputation and that’s tanking.
Starbucks’ Reputation Drops
Stephen Hahn, executive vice president of Reptrak, says Starbucks’ reputation went from a strong 71.5 points in 2021 on a 100-point index to a vulnerable 57.7 points this January in an exclusive report shared with me. Starbucks did not return my request for comment.
Starbucks Reputation 2021 to January 2025
Courtesy of RepTrakReptrak has been measuring brand reputations for more than 20 years across seven dimensions or what it calls drivers of reputation: Products/Services, Innovation, Workplace, Conduct, Citizenship, Leadership and Performance.
“Starbucks is strong in two things: great products and services and financial performance, but that’s only two of the seven drivers,” he explained. It’s important to note that the perception of strong financial performance is among consumers, not financial analysts, so people generally feel that Starbucks makes a lot of money.
So the greater question might be, how is Starbucks using all the money it makes to benefit its employees and customers, besides just giving employees a job with benefits and customers something tasty drink.
“Starbucks still is a strong retail brand, based upon the Brand Finance and Interbrand reports. But even a strong retail brand doesn’t translate into a strong corporate reputation. That might be the problem Starbucks is not solving for and it seems to be where many of its challenges reside,” Hahn observed.
Restoring Goodwill
In other words, Starbucks has lost a lot of the public’s goodwill over the last few years as measured in its corporate reputation, which is based on a nationally representative sample among those somewhat or very familiar with Starbucks, not just those aware of the brand. Overall RepTrak has collected ratings from more than 2,300 Starbucks “informed” individuals since January 2020.
To its credit, last September, Starbucks brought in a new CEO, Brian Niccol, to turn the company around after the less-than-stellar performance under previous CEO Laxman Narasimhan over his two years at the post.
Upon his arrival, Niccol introduced a four-pronged “Back to Starbucks” turnaround strategy. The new strategy hinges on taking care of customers, getting the “morning right,” reestablishing Starbuck’s as a community coffeehouse and telling its story better.
It kicked off its “Back to Starbucks” strategy to the public with a nationwide promotion the day after Super Bowl Sunday by offering a free coffee to members of its Starbucks Rewards Loyalty program.“Starbucks Monday” was the company’s most popular offer in its 50+ year history, according to Restaurant Business. And more people signed up for its loyalty program on that day than any day before.
However, Hahn observed, “To complete a turnaround, Starbucks can’t just rely on slick marketing, good-quality products or the coffee experience. It needs to find a new angle that allows people to better understand the totality of Starbucks and what it stands for.”
To do that, Starbucks must address its reputational shortfall in product value and innovation, leadership, conduct and workplace.
Product Value And Innovation Shortfall
Reptrak’ products/services driver includes measures of both the quality and value of goods and services. Starbucks ranks fairly high in quality, but on the value side of the equation, it gets its worst rating overall.
“You can’t win without there being a very strong value proposition to your business,” Hahn observed. “That doesn’t mean you have to lower your prices. It means you need to tell a compelling story around value. I’m not sure Starbucks has won that yet.”
On the product side too, it’s fairly weak on new products recently. Olive oil-infused coffee, first introduced in February 2023, was a big miss. However, its lineup of new products may help to overcome that shortfall. The newly introduced espresso-centric Cortado is more on-brand and its range of new Pistachio drinks has a curiosity appeal.
Yet, Hahn stresses the need for Starbucks to introduce “major new product innovation,” like the Pumpkin Spice Latte or Frapuccino, not just special offers or limited-time promotions.
Leadership Challenge
Leadership, specifically having a strong and appealing leader, is also a challenge for Starbucks. “We’re not passing judgments here, but the latest score on having a strong and appealing leader, specifically Brian Niccol, is not great. There’s a lot of room for improvement,” Hahn said.
Certainly, there is some hangover from the failed leadership of ex-CEO Narasimhan. And it’s hard for Niccol to step into the shoes of legendary Howard Schultz, who had to return two times to helm the company when it went off track, most recently before handpicking Narasimhan as his successor. Schultz is now Starbucks chairman emeritus and has resigned from the board, though he remains the company’s single largest shareholder.
Starbucks coffee seemed to flow in Schultz’s veins. For Niccols to outlast the short-lived period of his predecessor, he needs to model that level of devotion to the Starbucks brand and its many stakeholders, including employees and customers. He can’t just talk-the-talk but must walk-the-walk.
“The data suggests that people haven’t fully bought into Brian Niccol. A strong recommendation would be to go on a charm offensive and tell the ‘Brian Niccol’ story. What is your vision? What are your aspirations? What are your passions around Starbucks?”
There was never a question of this when Schultz was leading. But for Niccol, “That story still needs to be told,” Hahn observed.
Workplace And Conduct In Question
Also pulling down Starbuck’s reputational score are poor marks on openness and transparency, part of the conduct driver, and concern for employee well-being, a factor within the workplace driver.
“Perceptions around Starbucks as an employer brand are weak, specifically its concern for employee well-being,” Hahn said, pointing to the strike at many Starbucks locations this past Christmas Eve. “That’s very bad publicity for the company.”
Striking employees were vocal about how they are treated and managed and the negative effects are bound to rub off on customers. “Negative feelings run really deep here. Twenty-years back, Starbucks was an aspirational place to work. It doesn’t have that luster anymore. As an employer brand, it’s partially damaged goods.”
Those negative employee feelings were exasperated by the well-publicized pay package Niccol got in joining the company – totaling up to $117 million, including stock options, that is said to be one of the highest in corporate America – not to mention the cushy deal allowing him to work from home in California with a corporate jet at his beck and call to fly him back and forth as needed.
Starbucks faces a growing movement to unionize at the grass roots. Over 11,000 baristas at 500 Starbucks stores have joined the Starbucks Workers United. That’s only a fraction of the 200,000+ employees and 11,000 company-owned stores in the U.S., but it signals growing frustration behind the counter. A typical barista makes less than $20 per hour.
Another lagging factor is having a positive influence on society. “Perceptions of Starbucks as being a purpose-driven employer brand are waning,” said Hahn. All in all, Starbucks has a lot of work to do recover what it’s lost in customer and employee goodwill.
“Culture is your north star and your reason for getting out and doing your job every day. In its absence, an employee loses their reason to believe,” Hahn explained. “That sense of togetherness – that sense of culture – is diminishing.
“Starbucks has become a more corporate and money-driven culture and that is trumping anything else in terms of community values and sense of purpose within the realm of the company. That’s potentially very dangerous ground. There has to be a combination of the two: a love for Starbucks to drive more profits and a love for Starbucks as a purposeful, good company. That sense of corporate values needs to be reinstilled.”
Let The Turnaround Begin
Hahn observes that Starbucks’ reputational shortfall can be fixed, but the company must identify the issues and get to work fixing them.
“The data shows there are a lot of people out there that don’t like Starbucks anymore, so they need a new reason to believe, to reconsider going back to Starbucks for a coffee experience, because right now, they’re not feeling the love.”
Niccol’s “Back to Starbucks” strategy is a start and it will take time to restore trust which is easier to lose than to regain, Hahn observed.
“There’s a lot of win-back opportunities out there for people to consider coming back to Starbucks. While the jury is still out, there’s still inherent risks that need to be addressed. It is really investing in the right things? It is enough to turn the corner or is there more the company could be doing right?
“You can just say ‘I’m going to win you back.’ You have to prove it and give people a reason to believe. It’s got to be more than slick marketing. There’s got to be a connection between the promises you make and the ones that you fulfill. The data suggests there’s a bit of a disconnect somewhere along the line there,” he concluded.
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