Starbucks has been facing a decline in sales recently as it transitioned from a traditional sit-down coffee shop to one where customers place orders on their phones and grab their drinks from the counter. In an effort to fix this, new CEO Brian Niccol aims to return Starbucks to its roots as a “community coffeehouse” with comfortable seating, a distinct design, and a clear separation between “to-go” and “for-here” service. Niccol, known as the restaurant industry’s Mr. Fix-It, has successfully turned around businesses like Chipotle and Taco Bell and is hoping to do the same for Starbucks.
The current decline in Starbucks’ sales can be attributed to various factors, including high prices, slow pickup orders on the app, and lackluster food options. Additionally, Starbucks has seen an increase in union organizing at stores due to employee frustrations with working conditions, pay, and benefits. The company is also transitioning from a brick-and-mortar business to one that is more online-driven, with mobile app and drive-thru orders accounting for over 70% of sales at 9,500 company-operated stores in the United States.
Niccol has been actively visiting stores, talking to employees and customers, and listening to their feedback. He acknowledges that some Starbucks stores can feel transactional, overwhelming, and inconsistent, with long wait times and hectic handoffs. In response, he plans to focus on empowering baristas, ensuring they have the tools and time needed to craft great drinks. Many employees have expressed concerns about mobile orders overwhelming stores and putting a strain on workers.
Despite his commitment to improving Starbucks, Niccol has faced scrutiny for not permanently relocating to the company’s Seattle offices and using a corporate jet to commute between California and Seattle. However, the company has stated that Niccol will spend time in stores, at headquarters in Seattle, and with Starbucks employees worldwide to gain a better understanding of the business and address its challenges effectively. The future of Starbucks under Niccol’s leadership remains uncertain, but his focus on enhancing the in-store experience and empowering employees could lead to a positive turnaround for the coffee chain.
