--- title: "Starbucks Bets on Smaller, Faster Stores to Fend Off Dutch Bros" description: "Starbucks CEO Brian Niccol is pushing a compact new store format — as small as 600 square feet on a half-acre lot — and a four-minute service target to claw back ground from fast-growing drive-thru rivals like Dutch Bros, part of a turnaround that is starting to show in the numbers." category: "Companies" category_url: https://boursel.com/category/companies author: "Kenji Nakamura" published: 2026-06-27T20:43:40.000Z updated: 2026-06-27T20:43:40.000Z canonical: https://boursel.com/article/starbucks-bets-on-smaller-faster-stores-to-fend-off-dutch-bros tags: ["starbucks", "dutch-bros", "brian-niccol", "coffee", "retail", "turnaround"] --- # Starbucks Bets on Smaller, Faster Stores to Fend Off Dutch Bros Starbucks CEO Brian Niccol is pushing a compact new store format — as small as 600 square feet on a half-acre lot — and a four-minute service target to claw back ground from fast-growing drive-thru rivals like Dutch Bros, part of a turnaround that is starting to show in the numbers. Starbucks is going small to compete. Chief executive Brian Niccol, speaking about the chain's expansion plans, laid out a strategy built on much smaller stores and faster service to take on the drive-thru chains eating into its turf, [Yahoo Finance reported](https://finance.yahoo.com/small-business/articles/starbucks-ceo-reveals-plan-beat-193700840.html). ## The plan: shrink the box, speed the line The centerpiece is a new, compact store format. Niccol said Starbucks can now "get on a 0.5 acre" lot and build locations as small as "600, 800 square feet" — roughly half the size of a standard café — while still offering full service. He framed it as a way to multiply the company's runway: "We've got clear line of sight on about 5,000" new sites, he said, adding that with the small-format capability "you can quickly see how that 5,000 becomes 10,000." The other half is speed. A core operational goal of Niccol's turnaround is **throughput** — how many orders a store completes per hour — with a target of four minutes or less for the average order. Starbucks has said a large majority of its U.S. company-run cafes are now hitting that mark, helped by an order-sequencing system and added staffing. Though Niccol did not name them, the targets are clear: drive-thru-first chains like **Dutch Bros** and 7 Brew, which have expanded rapidly across suburban America on smaller footprints and quick service. ## Why Starbucks needs it Niccol took over in September 2024 from Chipotle, inheriting a chain in a slump: U.S. **same-store sales** — the change in revenue at locations open at least a year, which strips out the effect of new openings — had been falling, with customer traffic down sharply. His "Back to Starbucks" plan has leaned on restoring the coffeehouse feel: condiment bars, ceramic mugs, comfortable seating and free refills. He has cast the fight in terms of experience, not just price. "What defines Starbucks is going to be a community," Niccol said. "It's going to be the barista customer experience, and it's going to be this idea of craft and customization." ## The threat is real and growing Dutch Bros is not standing still. The chain ran **1,177 locations across 25 states** as of the end of March 2026 and counts more than 15 million loyalty members, per Yahoo Finance. Industry reports put its 2025 revenue around $1.64 billion, up nearly 28% from a year earlier, with plans to keep opening at a brisk pace. 7 Brew, another drive-thru concept, has topped 750 locations. Their model — cheap real estate, fast lines, heavy app engagement — is exactly what Starbucks' small-format push is meant to counter. ## The numbers are turning The turnaround is showing up in results. In its fiscal second quarter (ended March 2026), Starbucks reported U.S. comparable sales up **7.1%**, with revenue of about **$9.5 billion**, up 9% from a year earlier, and net earnings of roughly $511 million, [according to Fortune](https://fortune.com/2026/04/29/starbucks-niccol-luxury-turnaround-earnings/). Niccol said the gains spanned income levels: "When you offer experiences that feel unique and differentiated — a touch of luxury — it resonates across all income brackets." ## What it still has to prove The small-store rollout is early, and Starbucks has not detailed a construction timeline or budget for it. The company also still carries a far larger store base and cost structure than its nimble rivals — the very thing the compact format is meant to address but hasn't yet at scale. And weaker afternoon traffic, plus coffee-cost and tariff pressures, remain acknowledged headwinds. For now, though, the chain has done something it hadn't in two years: put up growth, and a credible plan to defend it. ## Sources - [Starbucks CEO reveals his plan to beat Dutch Bros at its own game](https://finance.yahoo.com/small-business/articles/starbucks-ceo-reveals-plan-beat-193700840.html) - [Starbucks CEO sees the turn in the turnaround](https://fortune.com/2026/04/29/starbucks-niccol-luxury-turnaround-earnings/)