Starbucks primarily operates and competes in the retail coffee and snacks store industry. This industry
experienced a major slowdown in 2009 due to the economic crisis and changing consumer tastes, with the
industry revenue in the US declining 6.6% to $25.9 billion. Before this, the industry had a decade of growth
consistent. Due to the economic slump, consumers spent less on luxuries like eating out, choosing to purchase
low-price items instead of high-priced coffee drinks due to shrinking budgets.3
The industry grew at a low
annualized average growth rate of 0.9% from 2008 till 2013 with current industry revenues at $29 billion in the
US. The industry is now forecasted to grow at an annualized rate of 3.9% over the next five years, with a potential
to reach $35.1 billion revenues in the US. This growth would be mainly driven by an improving economy,
increase in consumer confidence and expanding menu offerings within the industry. Starbucks dominates the
industry with a market share of 36.7%, Dunkin Brands with 24.6% and other competitors like McDonalds,