Brian Niccol, the newly appointed CEO of Starbucks, is set on steering the coffee giant back to its roots as a community-focused coffeehouse.
Niccol, known for his turnaround successes at Chipotle and Taco Bell, has laid out a vision for revitalizing Starbucks’ identity as a place where customers can sit, relax, and enjoy their coffee, moving away from the more transactional, app-driven model that has taken over in recent years.
In a letter to employees and customers on his second day as CEO, Niccol acknowledged that Starbucks had “drifted from its core” and is now committed to restoring its in-store experience with comfortable seating, clear distinctions between “to-go” and “for-here” orders, and an atmosphere that reflects the brand’s iconic sights, sounds, and smells.
Starbucks, once celebrated as a community gathering spot, has increasingly become defined by mobile orders and drive-thru services, which now make up over 70% of US sales. Niccol emphasized that while these channels are important, the company’s cafes need to be more inviting and comfortable, providing customers a reason to stay and enjoy their coffee in the store.
The shift back to a traditional coffeehouse setting is intended to address customer frustrations, which have been growing due to high prices, slow app orders, and inconsistent service. Niccol noted that he has been visiting stores and talking to both employees and customers, recognizing the challenges and identifying opportunities for improvement.
Niccol’s plan also includes better empowering Starbucks’ baristas, ensuring they have the time and tools to craft high-quality drinks. Mobile orders can often pile up, overwhelming workers and leading to longer wait times. To improve efficiency, the company plans to invest in technology and streamline operations, with a particular focus on delivering better service during the busy morning hours.
“Our baristas are at the heart of the Starbucks experience, and we need to give them the tools and the time to do what they do best,” Niccol stated.
He emphasized the importance of the barista experience in restoring the company’s core values.
While the US market is Niccol’s immediate priority, Starbucks also faces challenges abroad. In China, its second-largest market, the company has struggled to recover from the effects of the COVID-19 pandemic, compounded by rising competition. Niccol plans to address these issues after stabilizing the US business, focusing on capturing growth in international markets.
Additionally, Starbucks has faced boycotts in the Middle East related to US political involvement in the region. Niccol acknowledged these challenges and outlined plans to address misconceptions about the brand in those areas.
With declining sales and growing competition, Starbucks has experienced two consecutive quarters of reduced revenue. Despite these challenges, Niccol is optimistic about the future.
“This is our plan for the US, and where I need to focus my time initially,” he wrote.
He signaled that the company’s success will depend on reestablishing its role as a community coffeehouse while balancing the rise of mobile and drive-thru orders.
Niccol’s appointment comes after Starbucks’ ouster of former CEO Laxman Narasimhan, following several quarters of slumping sales and increasing pressure from investors and employees. As the company moves forward, Niccol is expected to spend his first 100 days visiting stores and meeting with employees and suppliers to understand the business’ operational needs and how best to implement his vision.
With input from the Associated Press, CNN, CNBC.
