Bloomberg Talks — Starbucks CEO Brian Niccol Talks Earnings, Growth, Unions

Date: January 30, 2026
Host: Bloomberg Interviewer
Guest: Brian Niccol (CEO, Starbucks)

Episode Overview

This episode features Starbucks CEO Brian Niccol in a candid conversation following Starbucks’ latest investor day and earnings report. The discussion centers on the company’s recent growth, operational strategy, efforts to revitalize in-store experiences, menu innovation, labor relations, overseas expansion (notably in China), and the evolving role of Starbucks in an increasingly competitive and changing market.

Key Discussion Points & Insights

1. Recent Growth and Turnaround (00:45–02:27)

• Financial Highlights: Niccol celebrated a strong quarter, with growth driven by higher transaction numbers, not just larger ticket sizes.

• Drivers of Growth:

  • Success came from both Rewards members and non-members returning or visiting more often.

  • Market share increased in store visitation.

    “The thing that was really exciting is to see the growth was driven by transactions... both groups growing in visits and as a result, our market share increase in visitation as well.”
    — Brian Niccol (01:02)

• Ticket Growth: Slightly lagged transaction increases, attributed to new protein-focused menu modifications and increased customer visits.

2. The Importance of In-Store (Cafe) Experience (02:27–05:55)

• Strategy Rationale:

  • Despite digital and drive-thru growth, Niccol insists the soul of the Starbucks brand is still rooted in the coffeehouse experience and human connection with baristas.
  • In-store business remains significant:

    “Our in store business is still over 20% … 60% of our customers made at least one purchase from the counter.” (02:46)

  • Multi-channel access is key, but the “third place” community aspect is foundational.

• Competitive Landscape: New entrants emphasize grab-and-go, but Starbucks’ differentiation relies on excelling in all channels plus the cafe.

• Operational Challenges: Maintaining quality across in-store, mobile, and drive-thru is complex.

  “A cafe experience happens in less than four minutes from order to drink with a personal handoff. Mobile order—we’re more on time and accurate than we ever have been. Our drive-thru during peaks are below four minutes as well.”
  — Brian Niccol (04:55)

3. Brand & Cultural Relevance (05:55–07:48)

• Return to Cultural Prominence:

  • Short- and long-term focus on menu innovation, marketing, and brand visibility.
  • Tracy Lieberman, head of marketing, credited for helping Starbucks regain “cultural relevancy.”

    “Our marketing, our menu innovation… one of the things we set out to do as part of this turnaround is get back into culture, get back to leading culture... Starbucks is back.”
    — Brian Niccol (06:00)

• Rewards Program Overhaul: Launching in March, now with three tiers (Reserve, Gold, Green) emphasizing personalization, easier access, and tangible rewards (physical black Reserve card).

  “We’re changing that because now when you get into the green tier... you can get a reward with not that much engagement.” (07:21)

4. Growth Rates, Margins, and Investment (07:48–09:53)

• Realistic Growth:

  • Acknowledges lower growth rates versus Starbucks’ “heyday.”

  • Sets new expectations: 3+% comparable sales, 5+% revenue growth, and earnings growth outpacing revenue.

    “Make no mistake, we are a growth company at scale, which is really exciting, I think, on the top line.” (08:09)

• Profitability Roadmap: Margin improvements expected by 2028 (from 13–15%), enabled by both top-line growth and $2B in cost savings.

  “We’ve guided people towards... into the 13 to 15% range on margins here by 2028. And then actually that’s just, I think a mile marker.” (08:48)

• Labor & Store Revamps:

  • Significant reinvestment (> $500M) in labor experience, leading to industry-low turnover rates (<50% vs >125% industry average).

5. Labor Relations and Unions (12:35–13:35)

• Unionization Efforts:
  • Open to reasonable agreements, but emphasizes sustainability for all partners.

    “I’d love to be able to find a deal so that we could, you know, get a contract and move on. But it’s going to have to be reasonable and ... sustainable so that all 400,000 partners ... can continue to have a great experience... and growth.”
    — Brian Niccol (12:49)

6. International Growth and China Partnership (13:35–15:56)

• China Strategy:

  • Recently sold majority stake to partner Bo You, aiming for faster, more competitive growth and expansion up to 15–20,000 coffeehouses.

    “...For our next chapter of growth, we just believe we needed a local partner to help us kind of figure out how we can grow faster.” — Brian Niccol (13:56)

  • Partnership considered “margin accretive” despite asset-light model.

    “In most cases, you see the margin actually rise and becomes margin accretive to the total business.” (15:09)

7. Scale, Store Footprint, and Market Opportunities (15:56–17:50)

• Right-Sizing Expansion:

  • Won't “change who we are”—focusing instead on operational excellence and intentionality.

    “We don’t need to change who we are. We just need to be great at who we are and what we do.” (16:11)

  • Plans for 5,000 more U.S. stores; promise not to repeat over-saturation.

8. Expanding Dayparts and Menu Innovation (17:50–19:34)

• Afternoon Growth:

  • Sees multi-billion dollar opportunity in PM daypart.

  • Upgrades to cafe ambiance and menu (e.g., non-caffeinated drinks, protein- and fiber-forward foods) tailored to changing customer needs.

    “I think there is a multibillion dollar opportunity to grow our afternoon day part… and we pair that up with the right beverage and ultimately the right food.”
    — Brian Niccol (18:00)

  • Customization remains core, with launch of new energy refresher platform.

• No Olive Oil Drinks (for now): Humorous aside on trending menu ideas.

  “No olive oil.” — Brian Niccol (19:34)

9. Notable “Human” Moment (19:34–20:32)

• Personal Note: Niccol briefly discusses his alma mater’s (Miami University of Ohio) historic basketball run, connecting leadership “turnaround” themes across both Starbucks and his own college team.

  “It’s fun to see the school on the national stage. It’s a great school. I’ve got great friends, great memories. So it’s fun to see them having success. And I’ll tell you what, I’m watching every game and rooting really hard.”
  — Brian Niccol (20:00)

Notable Quotes & Memorable Moments

• On Starbucks' Core Identity:

  “Starbucks is defined by the cafe and the coffeehouse experience... it’s the soul of Starbucks.”
  — Brian Niccol (02:49)

• On Growth at Scale:

  “We are a growth company at scale, which is really exciting.”
  — Brian Niccol (08:09)

• On Union Negotiations:

  “I’m a believer in that you can find a solution, but it’s going to have to be reasonable so that everybody can be successful long term.”
  — Brian Niccol (13:20)

• On International Expansion:

  “There’s so much opportunity for growth. And when you have these local partners in these international markets, we just end up... getting access to the premier real estate and at a speed that we couldn’t do from our Seattle offices.”
  — Brian Niccol (15:56)

Timestamps for Key Segments

| Timestamp | Segment | |-----------|----------------------------------------------------------------------------------| | 00:45 | Start of interview – growth and financial performance | | 02:27 | Importance of in-store/cafe experience | | 04:42 | Managing the complexities of omni-channel operations | | 05:55 | Brand’s cultural comeback, marketing, and menu innovation | | 06:47 | Rewards program revamp | | 08:09 | Growth expectations and margins | | 09:53 | Pricing power and economic considerations | | 12:35 | Labor costs, partner experience, low turnover | | 12:49 | Unionization efforts and current conversation status | | 13:35 | China strategy and partnership with Bo You | | 15:56 | Asset-light model and margin expectations | | 16:11 | Scale, brand identity, and intentional operations | | 17:13 | Store expansion plans and location strategy | | 17:50 | Afternoon daypart ambitions and menu innovation | | 18:37 | Beverage innovation (energy refreshers, customization, non-caffeinated options) | | 19:34 | No olive oil drinks joke | | 20:00 | Miami University (Ohio) basketball and leadership theme |

Episode Summary

In this comprehensive conversation, Brian Niccol outlines a bold but disciplined vision for Starbucks, rooted in operational rigor, relentless focus on the brand’s identity, and creative adaptation to new consumer behaviors. While proud of progress in earnings, market share, and culture, he is open about ongoing challenges, including margin expansion and labor relations. International plans, especially in China, reflect a sophisticated partnership approach. Expanded dayparts, menu innovation, and digital channels will power growth—while affirming Starbucks’ irreplaceable role as the “third place” for communities worldwide.