New Starbucks CEO brewing up plan in midst of sales slump
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Starbucks’ new CEO has some “grande” plans for the coffee chain to help satisfy the company’s bean counters.
Brian Niccol, who took over last week after previously serving as CEO of Chipotle Mexican Grill, outlined his plan for the struggling Seattle-based company, vowing to “re-establish the brand as the community coffeehouse.”
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In an open letter, Niccol said he would first focus on U.S. retail outlets delivering drinks and food on time and elevating the in-store experience for customers.
Niccol said there must be a distinction between “to-go” and “for-here” services at Starbucks locations.
Niccol replaces Laxman Narasimhan, who was hired two years ago.
The company has faced heat from activist hedge funds during a months-long sales decline, the New York Post reported.
The new CEO said he plans to visit stores to meet with suppliers and partners in his first 100 days to work out issues in the company’s supply chain and mobile app.
“In some places — especially in the U.S. — we aren’t always delivering. It can feel transactional, menus can feel overwhelming, product is inconsistent, the wait too long or the handoff too hectic,” Niccol wrote. “These moments are opportunities for us to do better.”
Comfortable seating will also be a priority, as well as “inviting spaces to linger,” as the brand tries to re-establish its reputation as a community cornerstone, the CEO said.
“We’re getting back to Starbucks,” he said. “We’re refocusing on what has always set Starbucks apart.”
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The company’s shares rose 1.2% last Tuesday.
Niccol has been credited with helping turn around Chipotle, boosting the burrito chain’s stock by more than 50% over the past year.
Starbucks shares rose a record 25% upon news of his hire, while Chipotle shares dropped.
Starbucks deployed equipment upgrades over the summer as part of a plan to help alleviate wait times and boost efficiency in its U.S. stores.
The company must “capitalize on its strengths” in its China business, Niccol added, as that division’s comparable sales have fallen for two straight quarters.
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