Starbucks is facing more competition in the U.S coffee market from smaller chains that are growing rapidly. Regional brands and boutique cafes draw customers by offering lower prices, simpler menus, and a greater focus on local identity. With inflation affecting how people spend, many customers prefer independent shops or fast-growing chains that provide similar offerings without the high costs of Starbucks.
Newer competitors also rely on drive-thru convenience, aggressive loyalty programs, and social-media-driven marketing to build stronger followings in the digital world, especially among younger consumers.
These brands prioritize speed and customization, positioning themselves as modern alternatives to Starbucks’ cafe-centered experience.
Technomic data, a food industry consulting firm, shows that Starbucks’ share of U.S coffee shop spending dropped from 52 percent in 2023 to 48 percent in 2024 and 2025, while Dunkin expanded its market share after opening its 10,000th U.S location.
World Runs on Fast Coffee
Starbucks has been the dominating U.S coffee chain for the longest. Recently, that has changed with the new rise of other coffee shops. Fast-growing drive-thru chains like 7 Brew, Scooter’s Coffee, and Dutch Bros continue to expand across the U.S.
Chinese brands such as Luckin Coffee and Mixue have begun opening stores in the American market. High-end chain Blue Bottle, which operates 78 U.S. locations, has added two more stores since the start of the year. Even major fast-food brands like McDonald’s and Taco Bell are stepping up their beverage menus to compete for coffee customers.
According to the National Coffee Association in 2024 and 2025, an estimated 66 percent of Americans reported drinking coffee daily. Before Starbucks became the large global chain we now know today, it was a small Seattle-based coffee shop before former CEO Howard Schultz acquired it in 1987.
Based in Nebraska, Scooter’s Coffee only had 200 locations in 2019; it now has more than 850. Arkansas-based 7 Brew only had 14 locations in 2019, but now it has more than 600.
Hospitality for Consumers
Starbucks stays confident even with growing competition at its heels. At an investor conference on Thursday, company leaders said their work to improve service and make stores more inviting has already boosted traffic at U.S locations. They also plan to add 25,000 seats to their U.S cafes by this fall.
In an interview with Business Insider and Chief Operating Officer of Starbucks, Mike Grams, stated, “Growth doesn’t require us to become something new. It requires us to be exceptionally good at what we already are.”
Looking ahead, Starbucks plans to open more than 575 new U.S stores over the next three years. The company has also designed a smaller-format store that costs less to build while still offering indoor seating, drive-thru service, and mobile pickup. Starbucks said this new design will allow the brand to expand into locations that were previously unavailable.
Starbucks will be reinventing its menu selection, adding new pastries and healthier snacks that are high in protein and fiber to win back its customers.
The Future for Starbucks
At last week’s Investor Day, Starbucks emphasized that the “Back to Starbucks” plan is the core of its strategy. Company leaders presented a life-sized model of a redesigned cafe aimed at encouraging customers to stay longer. At the same time, Starbucks stressed that the plan remains flexible.
The company appears to be taking cues from smaller, trend-driven beverage brands and adjusting its approach. Rather than relying solely on past strategies, Starbucks is updating the “Back to Starbucks” plan with a stronger focus on the future.
In November 2025, Starbucks Company announced it had signed an agreement to create a joint venture with Boyu Capital, a top alternative investment firm, to manage its retail operations in China. This partnership is a major step in Starbucks’ ongoing transformation and highlights its dedication to boosting long-term growth in China, one of its key and fastest-growing markets worldwide.
The joint venture strengthens Starbucks’ presence in China by combining its global brand with Boyu Capital’s local market expertise. The partnership helps Starbucks navigate regulations adapt to local consumer preferences, and expand more efficiently while supporting long-term growth in one of its fastest-growing markets.
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