Starbucks CEO Brian Niccol promises sweeping changes to US locations


Starbucks CEO Brian Niccol told investors on Wednesday that he plans to overhaul Starbucks' U.S. locations, adding more casual seating, ceramic mugs and a coffee-condiment bar that will cut customer wait times by four. Will be less than a minute.

Facing falling demand for its pricier beverages in key markets of the US and China, as well as a decline in its stock price, Starbucks investors are counting on a new CEO to get the company back on the path to growth.

The company last week suspended its forecast for its 2025 fiscal year.

“Our financial results were very disappointing and it is clear that we need to fundamentally change our strategy to win back customers and return to growth,” Nicol said.

Starbucks CEO Brian Niccol told investors Wednesday that he plans to improve Starbucks' U.S. locations, including adding more casual seating, ceramic mugs and a coffee-condiment bar. AP

The CEO said he wanted to make it “easier for our customers to get a cup of coffee” and that the company aimed to reduce wait times to less than four minutes. To help with this, and clarify prices, Niccol also said the company will be simplifying its menu.

Niccol said staffing levels could increase, addressing a complaint that has been frequently voiced by baristas and Starbucks Workers United, which is seeking to unionize Starbucks workers. “I want to make sure teams have enough staff to win every transaction,” he said.

Investors are expecting Niccol, an industry veteran and former head of Chipotle Mexican Grill, to simplify the company's leadership and operating structure, and reinvigorate the coffee-house culture in Starbucks' U.S. stores.

Nicholl said ceramic mugs will be offered to in-café customers, and actions will be taken in the coming months to separate pick-up orders from sit-down orders. He said “common sense guardrails” would be placed on mobile orders.

The company's shares have risen nearly 26% since Nicol named Lakshman Narasimhan as CEO in a surprise announcement in August. Christopher Sadowski

The company's shares have risen nearly 26% since Nicol named Lakshman Narasimhan as CEO in a surprise announcement in August. There was little change in them in extended trade on Wednesday.

Starbucks on Wednesday reported a 7% decline in global comparable sales for the fourth quarter, after reporting preliminary results for the quarter ended Sept. 29 last week.

Comparable transactions, which reflect traffic to its stores, fell for the third consecutive quarter in North America.

The Seattle-based company's strategy of driving demand through promotions and better loyalty program offers has failed due to low spending by cost-conscious consumers. Niccol acknowledged Wednesday that the company has focused too much on rewards members.

Nicole wants to reduce customer wait times to less than four minutes. AP

Its loyalty program growth slowed in the fourth quarter, with 90-day active members in the US remaining stable sequentially. This compares with 3% sequential growth recorded in the third quarter.

Starbucks also faces an uphill battle in China, where it faces a tumultuous macroeconomic recovery and stiff competition from local brands.

Comparable sales in China, the company's second-largest market after the U.S., declined for three consecutive quarters, falling 14% in the fourth quarter.

International comparable sales declined 9% in the fourth quarter, more than the 6.5% decline expected by analysts, according to data compiled by LSEG.

The company's net income fell to $909.3 million, or 80 cents a share, from $1.22 billion, or $1.06 a share, in the fourth quarter ended Sept. 29 a year earlier.

Some menu simplifications are coming soon. A spokesperson for the company confirmed Wednesday that the chain will remove its olive-oil-infused drinks from the menu on Nov. 7, a decision backed by former Starbucks CEO Howard Schultz, though the decision was made before Niccol became CEO. Was.

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