Brian Niccol, Starbucks’ newly appointed CEO, has unveiled his strategy to rejuvenate the coffee giant’s brand, shifting focus from his predecessor Laxman Narasimhan’s approach. Niccol, who began his role just two days ago, has outlined his initial 100-day plan and identified issues that contributed to Narasimhan’s abrupt departure last month.
In a letter addressed to employees, customers, and stakeholders, Niccol criticized the current state of Starbucks stores, particularly in the US. He noted that some locations lack the “magic” that once drew customers in, describing experiences as too transactional, with overwhelming menus and inconsistent product quality. He expressed a need to realign with Starbucks’ core values.
Under Niccol’s leadership, Starbucks shares have seen a significant increase, rising approximately 20% since his appointment. This optimism is fueled by Niccol’s reputation for successfully turning around Chipotle Mexican Grill from 2018 onwards.
Niccol’s strategy includes a renewed emphasis on making Starbucks locations more community-centric. He plans to transform stores into inviting spaces with comfortable seating and clear distinctions between takeaway and in-store experiences. This marks a departure from the recent trend of prioritizing mobile app orders and drive-through service.
Narasimhan had already initiated changes to improve store efficiency and enhance the café experience by expanding seating. However, Starbucks has faced declining same-store sales globally for two consecutive quarters, and its stock performance had lagged behind the broader market before Niccol’s appointment.
Niccol will initially focus on the US, Starbucks’ largest market, with priorities including improving service during busy morning periods, enhancing barista experiences, and reinforcing the company’s narrative. He emphasized a commitment to defining Starbucks’ identity on its own terms.
Internationally, Starbucks has encountered challenges, including declining sales in China and boycotts in the Middle East related to the Gaza conflict. Niccol aims to address these issues by exploring growth opportunities in China and other key markets such as the Middle East, Asia Pacific, Europe, and Latin America.
Following Niccol’s announcement, Starbucks shares increased by 1.2% to close at $93.34 on Tuesday.