Starbucks slashes prices and revamps loyalty to combat U.S. sales slump

Starbucks is facing a drop in sales, particularly in the U.S., as economic pressures push consumers toward cheaper options. The coffee giant is now rolling out discounts and boosting its loyalty programme to stay competitive in a crowded market.

The company still dominates globally, with over 40,500 stores—more than 16,800 in the U.S. alone—but rivals like Dunkin' and local chains are making gains in key urban areas. The slowdown in U.S. sales comes as shoppers cut back on discretionary spending. Starbucks' premium pricing has left it exposed when budgets tighten, while competitors offer lower-cost alternatives. At the same time, mobile ordering investments have helped lift average transaction values, showing digital growth remains a bright spot.

In China, the picture is different. Urbanisation and a booming coffee culture have driven positive sales figures there. Starbucks plans to capitalise on this by expanding to 9,000 Chinese locations by 2025. Globally, the chain aims to open 600–650 new stores in fiscal 2026, with a focus on smaller, convenience-led formats like its 'Arrivals' concept.

The company's response includes a multi-year strategy centred on digital engagement and new store designs. Loyalty programme upgrades and targeted discounts are also part of the push to win back customers in competitive markets. Starbucks' next steps will test whether its digital and store format changes can offset weaker U.S. sales. The brand's strong performance in China and ongoing global expansion provide some balance. But with rivals gaining ground, the focus on affordability and convenience will be key to holding its market lead.