New Starbucks chief Brian Niccol on Tuesday outlined his plan to turn around the Java giant, vowing to “reestablish the brand as the community coffee shop.”
In his first week at the helm, Niccol said in an open letter that he would initially focus on U.S. stores delivering just-in-time drinks and food and enhancing the in-store experience for customers, many of whom have grappled with long wait times. waiting for their expensive lattes.
There should be a clear distinction between to-go and to-go service at Starbucks locations, wrote the former CEO at burrito chain Chipotle Mexican Grill.
Starbucks named Niccol as CEO last month to replace Laxman Narasimhan less than two years after he was hired for the top job. The company faced mounting pressure from activist hedge funds and a monthly sales decline.
Niccol said he would visit stores to meet with suppliers and partners in his first 100 days to iron out issues in the company’s supply chain and mobile app.
“In some countries – especially in the US – we’re not always delivering. It can seem transactional, menus can feel overwhelming, product inconsistent, wait too long or delivery too rushed,” Niccol wrote. “These moments are opportunity for us to do better.”
The company will make sure the stores are designed with comfortable seating and “inviting places to linger” to restore its reputation as a cornerstone of the community, Niccol said.
“We’re going back to Starbucks,” he said. “We’re focusing on what has always set Starbucks apart.”
Shares of Starbucks rose 1.2% on Tuesday.
Niccol is widely credited with orchestrating a turnaround at Chipotle that sent the burrito chain’s stock up more than 50% over the past year.
Shares of Starbucks rose 25% — a record percentage gain — on the news of his hiring, while shares of Chipotle fell.
Over the summer, Starbucks rolled out a Siren System plan — which includes equipment upgrades — across U.S. stores to help reduce wait times and increase efficiency.
Nicol also mentioned improvements to be made in its international divisions.
He said Starbucks needs to “capitalize on its strengths” in its China business, as competition from more affordable coffee rivals has hurt Starbucks’ share of that market. Its China division’s comparable sales have fallen for two consecutive quarters.
Niccol said Starbucks will also try to “dispel misconceptions” about the brand in the Middle East as boycott campaigns linked to the war in Gaza have targeted the coffee chain.
Starbucks has also faced pressure from activist investor Elliott Investment Management this year to improve its business as the company’s sales stagnate.
By postal wire
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