Shares in Starbucks surged almost 10% after the bell yesterday after the coffee giant announced better-than-expected Q4 2023 earnings. The company’s same-store sales rose by 8% in the quarter, leading to net sales of $9.37 billion, an 11.4% gain. Starbucks stock (ticker: SBUX) closed at just north of $100 per share.
But in addition to the investor-pleasing Q4 results, the company also announced something else: a detailed long-term growth strategy, which Starbucks has dubbed its Triple Shot Reinvention with Two Pumps.
Cringeworthy name aside, the plan has five main elements, three of which are elevating the brand through better-run and renovated stores, doubling its current 75 million Starbucks Reward Membership base to 150 million by 2028, and finding $3 billion in savings by 2025.
New locations and doubling down on China
The final two elements are more ambitious. First, Starbucks plans to open a lot of new stores—an average of eight new stores per day from now until 2030. Currently, Starbucks has over 20,000 international locations in addition to 16,300 U.S. locations for a global total of roughly around 37,000 stores. But Starbucks wants its global footprint to hit 55,000 by 2030.
It plans to do that by increasing its U.S. store footprint to 20,000 over the long term, which means the majority of the eight new stores per day Starbucks says it will open will happen in international markets. The company specifically called out its China position when referencing its store growth opportunities, noting that “Starbucks China is uniquely positioned to support the growth opportunities the market presents.”
Starbucks’s high China hopes are no surprise considering how the company has cozied up to the CCP in recent years, as Fast Company has previously reported.
Worker friendly or just more work?
The final element of its Triple Shot plan is something that sounds worker-friendly on paper: Starbucks says it “expects” to double hourly income for its stores’ workers by fiscal year 2025. Given that Starbucks has been dealing with a wave of unionization efforts spurred by dissatisfaction over low wages, this sounds like a big win for the average barista.
However, it’s important to note some caveats.
That “expects” phrasing gives Starbucks leeway to kick the pay rises back later than 2025 if it’s financially beneficial to do so. In other words, doubling its workers’ hourly income isn’t a guarantee that Starbucks has committed to. Also, Starbucks says it will double its hourly income by FY25 compared to hourly income in FY20. The problem with that is that since 2021, inflation has increased the cost of living for the average worker, so saying you will double the cost of wages compared to 2020 wages isn’t going to help as much as it sounds like it will.
And there’s another catch: Starbucks says it will double hourly income “through more hours and higher wages”—not just through higher wages. If a worker’s only option to increase their income is to work more hours for their employer, the increased income merely means the worker needs to sacrifice more of their time. That’s not a raise nor a company offering to pay workers more for what they’re worth. (Starbucks says it will release more details of its increasing income plan next week.)
The bottom line
If you’re an investor, Starbucks’ Triple Shot plan sounds pretty good. But for the average worker who fuels Starbucks’ billions in revenue every quarter, the details of how the plan will benefit them are lacking.