Starbucks has announced a notable increase in customer traffic during the afternoon as it focuses on transforming its stores into all-day destinations. According to shared data, U.S. stores have seen a rise in customer numbers after 2 PM, with peak visitation rates recorded between 3 PM and 5 PM.
This development is a positive indicator for Starbucks, which aims to continuously boost customer traffic beyond its well-known morning hours. Niccol is working to steer the company back towards sustainable growth by targeting repeat visits and longer stays throughout the day.
Details of the Event
Eryn Silvey, Senior Vice President of Marketing and Global Development, stated that the company is witnessing more customers stopping by stores later in the day, whether for a break or to enjoy a refreshing drink. She noted that while mornings still represent a strong base for Starbucks, what is emerging now is a new addition: more occasions, more ways to visit, and additional reasons to head to stores throughout the day.
In a blog post last month, Starbucks mentioned that hours after 11 AM generated sales reaching $11 billion in the U.S. during fiscal year 2025. The Refreshers beverage platform has significantly contributed to this success, becoming the second-best-selling beverage category after espresso.
Background & Context
Historically, Starbucks has struggled with underperformance in the afternoon compared to its competitors in the fast food and beverage sectors. Niccol pointed out in a previous earnings call that building the afternoon period represents a significant opportunity for the company, potentially leading to a substantial increase in revenues.
In January, Niccol stated, "I believe there is a tremendous opportunity to capitalize on the afternoon period by offering beverages that better meet customer needs throughout the day." This focus on menu innovation and marketing reflects the company's commitment to enhancing the customer experience.
Impact & Consequences
Recent trends in customer traffic indicate that Starbucks' efforts to become an all-day beverage and food destination are beginning to pay off. The company has reported quarterly earnings stronger than expected, instilling confidence in investors regarding the new direction under the new leadership.
Starbucks' shares have risen by 21% since the beginning of the year, reflecting market optimism about the transformation strategies. Analysts at TD Cowen upgraded Starbucks' rating from "Hold" to "Buy," raising the price target for the stock to $120.
Regional Significance
Starbucks is considered one of the global brands that significantly influence coffee culture in the Arab world. With increasing interest from Arab consumers in innovative beverages, Starbucks may benefit from these trends by introducing new drinks that cater to local tastes.
The success of Starbucks in boosting afternoon customer traffic may encourage other companies in the region to adopt similar strategies to enhance sales during unconventional periods.