Starbucks Business Model Explained: Where Your $1 Really Goes

Starbucks keeps just 8 cents of every dollar you spend there. A year earlier, it was 15. So where do the other 92 cents go, and how did one of the world's most famous brands lose almost half its profit in a single year? In this video we follow one dollar through Starbucks' fiscal 2025 numbers: coffee, milk and cups, baristas and rent, headquarters, store closures, China, and the surprisingly profitable business hiding on grocery shelves. Then we look at what it would take to get back to 15 cents. ⏱ Chapters 0:00 Starbucks keeps just 8¢ 0:19 Follow the money 0:36 Three ways Starbucks makes money 1:13 Where your dollar goes 2:11 The answer: 8¢ 2:23 Inside one store 3:00 Fewer customers and operating leverage 3:40 Back to Starbucks 4:05 The cleanup: 877 stores closed 4:42 China and the price war 5:19 North America 5:39 The missing 7 cents 6:20 The most profitable Starbucks 7:14 Where the 8 cents go 7:49 Getting back to 15¢ 8:24 Three numbers to watch 8:47 What's next 📊 Sources Starbucks Q4 and full fiscal year 2025 results (Starbucks investor relations) Starbucks Q4 and full fiscal year 2024 results (Starbucks investor relations) Starbucks Form 10-K, fiscal year 2025 (SEC) Starbucks and Boyu joint venture announcement, November 2025 (Starbucks press release) Figures are rounded. "Profit" means operating profit before interest and taxes unless stated otherwise. The single-store model and the $6 drink are simplified illustrations using company-wide averages. This video is for educational purposes and is not financial advice. Business by Numbers is not affiliated with Starbucks. Footage: Pexels. Narration: AI voice. Music: original. #Starbucks #BusinessExplained #UnitEconomics