Bloomberg Talks

Episode: Starbucks Chairman & CEO Brian Chesky Talks Turnaround Plan

Date: October 30, 2025
Host: Bloomberg Interviewer/Analyst
Guest: Brian Chesky, Chairman & CEO of Starbucks

Overview

This episode features an in-depth interview with Starbucks CEO Brian Chesky on the company’s ongoing turnaround plan, known as the "Back to Starbucks" strategy. Chesky discusses operational improvements, store and service innovation, new product platforms, shifting market dynamics, and international expansion—with a focus on the strategic steps taken to reignite growth and performance at Starbucks, especially in North America and China.

Key Discussion Points & Insights

1. Turnaround Momentum & "Back to Starbucks" (00:23–02:03)

• The recent quarter is described as a "critical moment" in Starbucks’ turnaround. The "Back to Starbucks" plan and introduction of the Green Apron service standard resulted in transaction increases and positive comparable sales in September and October.
• Operational improvements included increased staffing, more hours for baristas, a better in-store customer experience, and productivity gains.
• International performance was highlighted, with strong quarters in Canada and China (the latter seeing its second consecutive quarter of comps growth).

Brian Chesky (00:48):
"Once we got the Green Apron service standard into the business, we saw a lot of really good things happen... our partners were set up with bigger rosters, more hours, and they were able to give customers better connection, great craft products, which then translated into transaction increases."

2. Staffing, Training & Operational Focus (02:03–03:35)

• Baristas and staff have embraced the new strategy, expressing appreciation for renewed focus on core coffeehouse values and empowered work environments.
• Staffing increases and training are key; backed by efficient onboarding and targeted service expectations ("great greeting," "great handoff," comfortable seating).
• Technology supports better order management behind the scenes, including drive-through, mobile, and café orders.

Brian Chesky (02:20):
"Our baristas and partners... love having the moments of connection with our customers and our customers love it as well."

3. Store Design, Uplifts & Cost Strategy (03:35–05:45)

• Starbucks aims to modernize interiors for comfort and efficiency. The approach balances strong design with cost controls.
• "Coffeehouse uplifts" are rapidly implemented overnight, significantly enhancing the customer experience without store closures.
• Goal for the year: more than 1,000 store uplifts out of 10,000+ company-operated locations, with scalability in future years.
• New stores are being designed with updated packages from the outset.

Brian Chesky (03:57):
"You can have great design, you can have a great seat, you can have a great atmosphere and then also be very cost conscious. And that's what we're doing here."

4. Margins, Restructuring & Investor Outlook (05:45–07:46)

• Acknowledges restructuring costs but emphasizes belief in margin recovery through topline growth and higher transaction profitability.
• Chesky champions a continuous improvement culture and assures investors of returning to pre-COVID earnings performance.
• Guidance about long-term growth and margin improvement will be detailed at the January investor day, not before.

Brian Chesky (05:59):
"I see no reason why we can't get back to earning what we used to earn, even pre Covid. So I'm very optimistic for where we can get to on the bottom line."

Brian Chesky (07:06):
"It is about where we are three years from now... we want to use this investor day to really give people guidance on where we see this business growing in the future."

5. Product Innovation: The Protein Platform (07:46–09:12)

• Launch of “protein cold foam” and related products have seen incremental sales.
• Notable lift in frequency among lower-frequency rewards customers.
• Over 90% of drinks can now have protein added—aligning with customer health/wellness trends and personalization demands.
• Early figures show protein drinks are encouraging repeat purchases and even driving more afternoon visits.

Brian Chesky (08:07):
"We're early days in the protein platform, but it's proving to be very incremental, which is terrific to see... over 90% of the drinks now you can get protein added."

6. Competition & Pricing (09:12–10:38)

• Starbucks recognizes new competitors (Dutch Bros, Seven Brew, Luckin Coffee, etc.) but maintains its premium positioning.
• Scale and operational breadth (drive-thru, mobile, delivery, café) reinforce value proposition.
• Focus: Differentiating by customer experience and service rather than price wars.

Brian Chesky (09:36):
"We have to be on the offense, we have to recognize the scale that we have and then we have to do the customer experience better than anybody else. And we are after being the world's greatest customer service company."

7. International Strategy & China Expansion (10:38–12:08)

• China has strong momentum with two consecutive quarters of comp growth.
• Starbucks plans a major partnership (pending) with a private equity firm to accelerate store growth from 8,000 to potentially 15,000–20,000, targeting deep expansion into lower-tier cities.
• Expected to finalize the deal soon; timing before the January investor day is possible but not guaranteed.

Brian Chesky (11:04):
"China is a tremendous growth opportunity... partners... are excited about getting this brand to go from 8,000 stores to 15, 20,000 stores."

Notable Quotes & Memorable Moments

• On service transformation:
  "We're getting back to being a Great coffeehouse. Again, our baristas and partners, they love doing the craft, they love having the moments of connection with our customers..." — Brian Chesky (02:20)

• On balancing cost and ambiance:
  "You can have great design... and also be very cost conscious." — Brian Chesky (03:57)

• On competitive advantage:
  "We are after being the world's greatest customer service company." — Brian Chesky (09:36)

Important Timestamps

| Segment | Timestamp | |----------------------------------------|-------------| | Turnaround plan & service strategy | 00:23–02:03 | | Staffing & partner engagement | 02:03–03:35 | | Store design/coffeehouse uplifts | 03:35–05:45 | | Margins, restructuring, earnings | 05:45–07:46 | | Product innovation (protein drinks) | 07:46–09:12 | | Competition & pricing | 09:12–10:38 | | China expansion/international strategy | 10:38–12:08 |

Conclusion

Brian Chesky presents a candid and optimistic outlook for Starbucks, centered on operational excellence, authentic service, rapid innovation, and bold expansion plans—particularly in China. Investors and employees alike are assured of sustained transformation, measurable progress, and long-term strategic focus, with significant milestones (including updated guidance and international deals) expected to be detailed at the January investor day.