Last week Starbucks blasted past Wendy’s and Burger King to become the No. 3 restaurant chain, posting $9.07 billion in domestic restaurant sales last year, up 8.7% from 2009. For a company that’s outspent on advertising anywhere from two to eight times by rivals and just a few years ago faced 600 store closings and negative sales, that’s quite an achievement.
At the heart of that turnaround are menu and product innovations, and the ability to maintain steady price points—which tend to be higher than other chains—even through a recession. “They’ve done a nice job creating complementary food offerings to go along with their beverages,” said Darren Tristano, exec VP at Technomic, referring to the company’s menus expansions with breakfast sandwiches and the surprise hit oatmeal. “They’ve added products that are healthier with less artificial flavors, and more emphasis toward natural or organic food. They’ve really been able to increase price on a premium-coffee beverage that is on par with what younger consumers are looking for.”