Starbucks Competitors Analysis

The Starbucks Corporation is the world’s premier specialty coffee roaster, marketer, and retailer. Founded in 1971, Starbucks has about 34,000 stores spread across six continents and in 78 countries (including about 15,444 in the United States). For a company that started as a single coffee shop in Seattle, it has come a long way to establish market dominance and brand loyalty among coffee drinkers.

Today, it’s the largest coffeehouse chain in the world by revenue and market share. It trades on the NASDAQ stock market under the ticker symbol SBUX. As of July 18, 2022, its market capitalization was $91.316 billion, with a forward dividend and yield of $1.96 (2.46%). According to a study by IBISWorld, the retail market for coffee in the US is worth an estimated $47.4 billion, with Starbucks commanding a 39.3% market share. 

Given the company’s size and scope, it’s no wonder its competitors take different approaches to challenge the coffee behemoth. One thing to understand about Starbucks’ competitors is that most of them aren’t trying to be the “next Starbucks.” They focus on different aspects of the business, like price, convenience, or customer experience. And while there are many regional and local players, only a handful of companies can go toe-to-toe with Starbucks nationally or globally.

In this Starbucks competitors analysis, we’ll look closely at some of the company’s top rivals and how they stick up against the coffee colossal.

starbucks cup

Bottom Line Up Front

The retail coffee and snacks store industry is highly competitive. Companies need to offer a differentiated product, focus on a specific niche or target market, or have a sustainable competitive advantage to stand out. Starbucks relies on its brand equity, global scale, and customer loyalty to stay ahead of the competition.

Top 5 Starbucks Competitors

  1. Dunkin’
  2. McDonald’s
  3. Costa Coffee
  4. Tim Hortons
  5. Peet’s Coffee

Starbucks Business Strategy and Revenue Model

Starbucks has a network of company-operated and licensed stores. The company owns about 51% of its stores outright and licenses the remaining 49% to qualified partners. This balance between company-operated and licensed stores gives Starbucks greater control over the quality of its products and services while allowing for rapid expansion into new markets.

In Fiscal 2021, the revenue from company-operated stores accounted for 85% of Starbucks’ total revenue, while the revenue from licensed stores was only 9%. The remaining 6% came from other sources, such as royalties from Nestle under the Global Coffee Alliance, collaborative partnerships, packaged coffee, ready-to-drink beverages, and tea. 

The sale of beverages makes up the vast majority of Starbucks’ revenue. In Fiscal 2021, Beverage sales were $18.32 billion, whereas food products accounted for $5.05 billion. Its total revenue for that financial year was $29.1 billion, representing a 24% increase from 2020. The Covid-19 pandemic significantly impacted Starbucks’ revenue and business operations in 2020, but the company was able to Bounce Back quickly in 2021. 

Given the strong financial results in 2021 and the company’s focus on expansion, it’s safe to say that Starbucks’ business strategy is working well. The company increased about 1,173 stores globally in 2021 and plans to add 2,000 more stores in 2022. The increased momentum from store growth and an increase in comparable store sales and transaction counts should continue to drive Starbucks’ revenue and profit growth in the coming years.

starbucks coffee

Starbucks Competitor Analysis

A study by research and market estimates that the global coffee market will reach $144.68 billion by 2025, a CAGR of 7.60% from 2021 to 2025. This statistic could mean that Starbucks has ample opportunity to grow its business further in the coming years. But the company will continue to face stiff competition from several entrenched rivals, both big and small. 

Here’s a closer look at some of Starbucks’ top competitors:

1. Dunkin’

dunkin' logo

Dunkin’, formerly known as Dunkin’ Donuts, is an American coffee and doughnut company. Founded in 1950, it has its headquarters in Canton, Massachusetts, and operates as a subsidiary of Inspire Brands, a holding company that owns Arby’s and Buffalo Wild Wings. It’s one of the largest coffee chains globally and second to Starbucks in the US in terms of operational units. The company has about 11,300 stores in 40 countries, with the US accounting for about 8,500 of those units. 

The Dunkin’ business model is quite different from that of Starbucks. Almost all Dunkin’ stores are franchises, meaning that its cost of goods sold and general and administrative expenses are lower than that of Starbucks. However, it has a more competitive pricing strategy focusing on the middle class, which could help it gain market share from Starbucks in the future. While this business model gives Dunkin’ a higher profit margin, it also limits the company’s ability to expand quickly into new markets.

Despite being a well-established business, Dunkin’ operates as a subsidiary of Inspire Brands, which means it doesn’t have the same level of control over its operations as Starbucks. The holding company structure could make it more difficult for Dunkin’ to respond quickly to changes in the market or its competitive environment. However, it could also give Dunkin’ the resources and scale it needs to compete more effectively with Starbucks. 

Before the $11.3 billion acquisition by Inspire Brands in 2020, Dunkin’ was a publicly traded company. It’s now a privately held company, which means it doesn’t have to disclose its financial results to the public. Its revenue for FY2020 was $1.25 billion, a decrease from $1.31 billion in 2019. We believe Dunkin’s revenue will rebound in 2021 as the company benefits from the Inspire Brands acquisition and continued store growth. 

2. McDonald’s

mcdonald's logo

McDonald’s Corporation is an American fast food company founded in 1940. The company has a long history of successful expansion and is now the world’s largest restaurant chain, with 38,000 locations in 100 countries. Unlike Starbucks, which has a more premium positioning, McDonald’s focuses on providing low-cost meals. 

Given its reach and brand recognition, McDonald’s is a significant threat to Starbucks’ growth plans. It offers various food items beyond burgers and fries, including breakfast items, chicken, salads, and desserts. The company competes directly with Starbucks in the breakfast category and has been aggressively promoting its McCafe coffee brand in recent years. 

See also: Chick-Fil-A Mission Statement Explained

In 2020, McCafe invested $381 million in a bid to expand to the Chinese market and challenge Starbucks’ dominance there. The company plans to open 4,000 McCafe coffee shops in China by 2023. If this expansion becomes successful, McDonald’s could seriously threaten Starbucks’ growth in China and other Asian markets.

McDonald’s and Starbucks have very different business models and strategies. While McDonald’s focuses on franchisees and a low-cost menu, Starbucks focuses on company-owned stores and a premium experience. However, both companies are global giants with vast reach and significant resources. 

In 2021, McDonald’s reported $23.223 billion in revenue, a 20.9% increase from 2020. Although Starbucks had more revenue in 2021 ($29.061 billion), its net income was lower than McDonald’s ($4.199 billion vs. $7.545 billion). McDonald’s focus on franchising and diversified low-cost menu items give it a competitive edge over Starbucks. 

3. Costa Coffee

costa coffee

Costa Coffee is a UK-based coffee chain founded in 1971 with headquarters in Dunstable, Bedfordshire. The company operates over 4,000 Costa Coffee shops in 32 countries and about 10,000 smart Costa Express self-service machines. While Costa does not have as many locations as Starbucks, many consider it a robust competitor due to its focus on the UK market. 

Costa has a strong brand identity and is the preferred coffee shop among UK consumers, with 2,792 outlets as of January 2022. It competes for the UK market share with Starbucks and Greggs, which control 2,176 and 1,089 outlets, respectively. While Costa’s brand identity is strong in the UK, it’s relatively unknown in other markets. The company plans to expand its international footprint and open more stores in existing markets like China and India. 

In 2019, Coca-Cola acquired Costa Coffee for $4.9 billion from its parent company, Whitbread PLC. The deal gave Coca-Cola a strong foothold in the global coffee market and expanded its product portfolio beyond soft drinks. It also helped Costa Coffee expand its international footprint and scale its operations. While the company is still in the early stages of expansion, it has significant potential to become a major player in the global coffee market. 

Coca-Cola plans to introduce Costa’s ready-to-drink (RTD) coffee products globally and distribute them through its vast beverage distribution network. If successful, Coca-Cola’s acquisition of Costa Coffee could be a game-changer for the global coffee industry. This expansion strategy could help Costa Coffee become a major competitor to Starbucks in the RTD coffee market. 

As a subsidiary, Costa Coffee doesn’t report its financials separately. In the fourth quarter of 2021, Global Ventures group, the company that manages Costa Coffee’s retail businesses within Coca-Cola, reported a 27% increase in revenue to $78 million. The growth was due to the opening of UK Costa Coffee outlets as the pandemic restrictions eased. 

4. Tim Hortons

tim hortons

Tim Hortons is a Canadian coffee chain founded in 1964 in Hamilton, Ontario. The company has grown to become one of Canada’s largest quick-service restaurant chains, with over 4,000 locations in 14 countries. Tim Hortons is also a major player in the US market, with over 630 locations as of 2020. While the company has a strong presence in North America, it doesn’t have a significant international footprint. 

Comparing Tim Hortons and Starbucks is like comparing apples to oranges. Tim Hortons focuses on breakfast and lunch items, while Starbucks focuses on coffee and snacks. However, both companies are quick-service restaurant chains with a strong presence in North America. As the coffee industry becomes increasingly competitive, Tim Hortons feels pressure to keep up with its rivals. 

Tim Horton’s coffee is relatively less expensive than Starbucks. A regular coffee at Tim Hortons costs $2.49, while a Starbucks tall coffee costs $2.95. Tim Hortons also offers a wider variety of breakfast items than Starbucks. While Tim Hortons has invested in new menu items and digital ordering, it hasn’t been able to keep up with Starbucks’ growth. 

In 2021, this quick service restaurant chain had revenues of $2.25 billion. This figure is relatively low compared to Starbucks, which had $29.1 billion in the same year. Perhaps its main competitive advantage over Starbucks is its lower pricing, but this may not be enough to sustain its growth in the long run. 

See also: Wendy’s Mission Statement Explained : The Key Messages

5. Peet’s Coffee

peet's coffee logo

Peet’s Coffee is a US-based coffee company founded in Berkeley, California, in 1966. As one of the pioneer specialty coffee roasters in the US, Peet’s Coffee has a long history and strong reputation in the coffee industry. The company operates 367 retail locations in the US and offers its products through grocery stores and online. 

Like Tim Hortons, Peet’s Coffee doesn’t have a large international footprint like McDonald’s and Starbucks. Moreover, its business model isn’t as diversified as its rivals. For instance, while Starbucks generates revenue from licensing and other sources, Peet’s Coffee relies solely on selling coffee products. 

Despite its relatively small size, Peet’s Coffee has competed effectively with Starbucks in the US market. One of the company’s competitive advantages is its focus on quality. Peet’s Coffee only sources the highest quality coffee beans and roasts them to perfection. This focus on quality has helped the company build a strong reputation among coffee enthusiasts. 

Peet’s Coffee’s parent company, JAB Holding Company, is a private equity firm that owns several coffee and food companies. In 2020, JAB Holding Company announced its intention to take Peet’s Coffee public through a SPAC transaction. If successful, this would give Peet’s Coffee the financial resources it needs to expand its operations and become a significant player in the global coffee industry. 

Starbucks SWOT Analysis

Below is a detailed SWOT analysis of Starbucks: 


  • Starbucks has a strong brand presence both in the United States and internationally
  • The company’s strong financials ensures the company has the resources to continue its expansion plans
  • Its quality, taste, and standardization ensure a repeat customer base 
  • It has well-planned strategic planning and reinvestment of profits
  • The company’s baristas are highly trained and provide excellent customer service 


  • Its products are relatively high priced compared to its competitors
  • Most of its products are imitable such as the taste of its coffee 
  • Tax avoidance in the European market affected its reputation
  • Its iced latte once ranked as the world’s worst drink


  • The global coffee market is growing, thus providing an opportunity for Starbucks to expand its operations
  • The company can focus on increasing its market share in the Asia-Pacific region
  • Through product diversification and business specification, Starbucks can enter new markets and industries
  • The company can strengthen online channels to boost sales


  • The company faces stiff competition from McDonald’s and Dunkin’ Donuts in the US market
  • The global economic downturn can lead to a decrease in consumer spending on discretionary items such as coffee
  • Intense competition in the global coffee industry can result in lower profits for Starbucks 
  • The company’s international expansion plans could be hindered by political and economic instability in certain countries
  • Union strikes could lead to increased labor costs and disrupt operations 


Starbucks Competitors Analysis (FAQs)

Question: Who is the biggest competitor of Starbucks?

Answer: The biggest competitor of Starbucks is Dunkin’ Donuts. The company competes with Starbucks in the US market and has a strong presence in the Northeast. Dunkin’ Donuts also has a large international presence, with over 12,000 stores in more than 50 countries. To compete with Starbucks, Dunkin’ Donuts has focused on expanding its product range and improving the quality of its coffee.

Question: What differentiates Starbucks from its competitors?

Answer: Starbucks differentiates itself from its competitors by prioritizing the quality of its coffee and the customer experience. The company sources its coffee beans from the best suppliers and roasts them to perfection. In addition, Starbucks has a team of baristas who are passionate about coffee and providing excellent customer service.

Question: Who is the target market of Starbucks?

Answer: Starbuck targets a wide range of consumers, from office workers who need a coffee to go to students who study in its cafes+ to families who enjoy its coffees and pastries. Its focus on middle to upper-class consumers has helped it become one of the most successful coffee chains in the world.


Starbucks competes in an industry with large international chains and small local cafes. The company has a clear competitive advantage in terms of its brand recognition, global presence, and customer loyalty. However, Starbucks faces stiff competition from Dunkin’ Donuts and other coffee chains. 

To maintain its market share and grow its business, Starbucks needs to focus on expanding its product offerings, improving the customer experience, and investing in innovative technologies. Other top competitors for Starbucks include McDonald’s, Costa Coffee, Tim Hortons, and Peet’s Coffee. These companies have a strong presence in the US market and offer similar products to Starbucks.

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