Starbucks CEO Brian Niccol outlined his strategy to revitalize the struggling coffee chain, focusing on faster service and creating a more inviting café atmosphere.
“We need a fundamental shift to bring customers back,” Niccol said in his first earnings call on Wednesday since joining Starbucks last month. “From my experience, getting back to our core identity and consistently delivering an exceptional experience will drive customer loyalty.”
Recent quarterly results, released early last Tuesday, revealed a 6% drop in U.S. comparable sales and a 14% decline in China, leading Starbucks to suspend its forecast for the next fiscal year amid the CEO transition.
Niccol’s plan emphasizes quicker service, especially for in-store orders. “We’re targeting a four-minute goal for fulfillment,” he said. To help streamline operations, Starbucks plans to reintroduce condiment bars in company-owned stores by early 2025, enabling brewed coffee orders to bypass more complex drink preparations.
The chain will also eliminate extra charges for non-dairy milk, the second-most-popular customization after adding an espresso shot, Niccol noted. In an effort to reclaim Starbucks’ “third place” identity, he proposed reintroducing comfortable seating, ceramic mugs, and personalized messages from baristas to enhance the in-store experience.
Additional measures, reported ahead of Wednesday’s call, include a three-day minimum office requirement for corporate staff and a menu revamp that will phase out Starbucks’ olive-oil-infused coffee options. Niccol has also shifted focus away from constant promotions, drive-thru, and mobile orders, which he says often lead to overly complex orders that disrupt efficiency.
While he did not delve into Starbucks’ China operations, he acknowledged challenges due to economic slowdown and increased competition from local brands. “I need to spend time in China to understand the market before making detailed plans,” he added.
Niccol emphasized that his confidence lies in Starbucks employees, who he described as deeply committed to coffee and customer satisfaction. “With a team like ours, I believe we can implement the right changes to turn the business around,” he said.