Starbucks’ new boss has said he will simplify the chain’s “overly complex menu” in a bid to win back customers amid falling sales.
Brian Niccol, who took over as chief executive last month, said the chain needed to “fundamentally change” its strategy.
The company unexpectedly released its earnings report on Tuesday, which revealed that sales had fallen sharply for the third consecutive quarter.
U.S. sales fell 6 percent as cash-strapped customers become increasingly put off by high prices and long wait times for drinks.
“Simplifying the menu may help solve the problem of cafes becoming more stressful and less attractive, but they are not the only problems at play,” Neil Saunders, managing director of GlobalData Retail, told DailyMail.com.
Starbucks’ new boss has said he will simplify the chain’s “overly complex menu” in a bid to win back customers amid falling sales.
“The main problem is that consumers are buying less Starbucks coffee to save money,” he said.
Offering more promotions doesn’t appear to have worked, Saunders said, and the chain announced it was reducing discounts offered through its mobile app earlier this month.
“The other issue compounding the problem is that Starbucks has gone astray in terms of the added value it is supposed to provide,” he added.
‘Their cafes are too busy, the queues are too long and many of them are not pleasant places to stay. That means some people have defected to rivals, including independent chains.
Chief executive Niccol said the company needed to address issues with staffing levels in cafes and the prices of its drinks and food.
“People love Starbucks, but some customers have told me that we have strayed from our core, that we have made being a customer more difficult than it should be and that we have stopped communicating with them,” he said. he said in a pre-recorded video after announcing the latest earnings report.
“As a result, some are visiting us less frequently and I think today’s results tell the same story.”
“Starbucks is still a huge business, but its growth engine has stopped turning and it will need to revise its proposition if it wants to move forward, especially in the North American market,” Saunders added.
Brian Niccol, who took over as chief executive last month, said the chain needed to “fundamentally change” its strategy.
U.S. sales fell 6 percent in the latest quarter as cash-strapped customers become increasingly put off by high prices and long wait times for drinks.
“The main problem is that consumers are buying less Starbucks coffee to save money,” said Neil Saunders, CEO of GlobalData Retail.
This comes as stressed Starbucks workers have complained of chronic understaffing issues, leading to delays at the cafes.
According to an internal survey seen by Bloombergonly 33 percent of workers at the company’s 10,000 U.S. locations say the stores consistently have enough workers.
“We constantly only have a minimum staff,” said one worker in the comments collected as part of the survey.
Employees asked Niccol about the issue at a company-wide forum on his second day on the job, according to a transcript of the event seen by Bloomberg.
‘The team is already working on it. “You are being listened to,” said the new general director.
In an open letter that same day, he pledged to “empower” baristas to better serve customers and give them the “tools and time” they need to do their jobs.
Starbucks said it has bolstered staffing levels at 3,500 stores over the past year.
“Feedback from our partners shows continued improvement in key areas of the Starbucks member experience, which remains a priority for us as a company,” a spokesperson told DailyMail.com.
‘For example, partners more often agree that they get the hours they want or need and that Starbucks offers a competitive salary.
“We will continue to seek member feedback in a variety of ways, including regular surveys and collaboration sessions to help us continually improve the member experience.”