Starbucks’ new CEO Brian Niccol is on a mission to turn around the coffee giant’s fortunes, starting with a retro profit.
Niccol has gone undercover in recent weeks at Starbucks locations in Los Angeles to observe the problems firsthand. The Wall Street Journal reported.
The former Chipotle boss came to the job after nine months of declining sales this year, after years of growth. Customers are fed up with high prices and long lines.
One idea he is considering is reintroducing free newspapers for customers who enjoy their coffee in the store.
Other planned changes include bringing back Sharpie pens for handwritten notes on customers’ cups and working to expedite simple orders.
During his undercover visits, Niccol was surprised by how long it took to get his basic Americano and watched as baristas were delayed by complex orders from other customers.
Brian Niccol took over as CEO in September after the board ousted his predecessor.
“Sometimes you just want to grab a cup of coffee real quick,” Niccol told the Journal.
To help with speed, Nicol announced last week that self-serve condiment bars, where customers can add their own milk and extra sugar, would return to stores next year.
Niccol took over the company in September.
After years of strong growth, sales have fallen in each of the three quarters of 2024.
In the most recent period from July to September, Starbucks sales fell six percent.
Cash-strapped customers are increasingly put off by high prices and long wait times for drinks.
“We’re in a bit of a hole, but that doesn’t mean we’re not able to get out of that hole quickly, efficiently and intelligently,” the CEO told the company in an internal meeting after the poor earnings report. in October.
Niccol replaced the company’s last CEO, Laxman Narasimhan, who was ousted by the board in August after just 17 months in the role.
Niccol is well regarded on Wall Street for turning around Chipotle’s fortunes as CEO, and Starbucks shares have risen 26 percent since he took over.
So far Niccol has announced some measures that have been popular with Starbucks consumers.
Starbucks has faced three consecutive quarters of slowing sales this year.
Customers have been put off by Starbucks’ high prices and long waits for drinks.
Last week, the chain announced it would stop charging extra for dairy alternatives in its drinks.
Previously, surcharges for options like almond and oat milk were as high as 80 cents in some places. The new policy, which goes into effect today, November 7, responds to years of customer complaints.
This change follows Starbucks’ decision last month to reduce certain promotions and discounts as part of a strategy to strengthen its finances and position itself as a premium brand.
However, a recent report shows that high prices have deterred some coffee drinkers, who are now cutting back to save money.
