Starbucks’ new Chairman and CEO, Brian Niccol, has set a goal to reinvigorate the company’s sales by ensuring customers receive their orders hand-delivered by a barista in four minutes or less. This objective is central to his strategy, as he aims to make it easier for customers to get their coffee.
Niccol, who joined Starbucks in September, revealed in his first conference call with investors that approximately half of the company’s transactions are already completed within four minutes. His focus will be on addressing the delays in the remaining transactions, which are caused by issues such as inadequate staffing during peak times, slow ovens, and a complex menu. Niccol emphasized the importance of identifying and resolving these bottlenecks.
Starbucks will prioritize improving service speed at the counter, followed by mobile and drive-thru orders. Niccol also plans to streamline the company’s food and drink offerings to allow baristas to consistently produce fewer items. Starbucks’ Oleato olive-oil infused beverages, which were introduced by former leader Howard Schultz, will be discontinued in most locations starting in early November, with some exceptions in Italy, Japan, and China.
Niccol believes that simplifying the customization process for drinks is crucial. Currently, the multitude of customization options confuses customers and sometimes results in suboptimal drink preparation. Starbucks has taken a step towards streamlining by announcing that it will no longer charge extra for using non-dairy beverages in its drinks, effective from November 7th. This change aligns with the second most-requested customization, after adding a shot of espresso.
Starbucks also plans to reduce the number of new stores and renovations for the next year to consider a store redesign. Niccol is determined to bring Starbucks back to its roots as a community coffeehouse. This includes reintroducing ceramic mugs and Sharpie pens for in-store customers, providing more comfortable seating, and creating separate areas for mobile order pickups.
Niccol’s comments came when Starbucks reported a disappointing end to its 2024 fiscal year. The Seattle-based coffee giant released the bad financial news last week. Starbucks said its revenue fell 3% to $9.1 billion in the July-September period as customer traffic slowed in the U.S. and China. For the full year, Starbucks’ revenue rose less than 1% to $36 billion. It also said that it would suspend financial guidance for its 2025 fiscal year to give Niccol time to assess the business.
