Starbucks can expand in areas like the Middle East, where he will seek to clarify the myths about the company, which has been the focus of boycotts due to its perceived stance in the Israel-Hamas conflict
The new CEO of Starbucks, Brian Niccol, wants to redouble the efforts to enhance the physical locations since digital ordering has drastically changed how the coffee chain does business.
In an open letter, Niccol expressed his desire to make the cafes more inviting by differentiating between dining and take-out service.
The recent store visits have revealed a shared sense that Starbucks is drifting away from core values.
Weeks after the board removed the former CEO because of a decline in sales and an identity crisis, Niccol assumed leadership on Monday.
The company is currently emphasisng orders through its mobile app since reduced seating in cafes has overwhelmed stores and completely changed the image of a cosy coffee shop it had built over decades.
The new CEO’s initial focus is on US business, where he plans to invest in technology, strengthen the supply chain, and improve the mobile ordering platform.
In some places, particularly in the United States, Starbucks doesn’t deliver. The experience of having to feel transactional, menus feel overwhelming, excessive waiting time, inconsistent quality of product, and hurried handoffs. These are opportunities to do better.
The expectations from investors are high. Since his appointment in mid-August, the shares have increased by almost 18%. But on Tuesday, the stocks saw minimal movement in line with the S&P 500 Index.
Niccol promised to put the focus back to being friendly coffee shops where people gather and enjoy the best coffee, handcrafted by the most talented baristas.
Other priorities include ensuring baristas have the resources and time to perform their job duly and speeding up service when the majority of the business happens.
The new CEO is currently developing a strategy for international markets. Starbucks can expand in areas like the Middle East, where he will seek to clarify the myths about the company, which has been the focus of boycotts due to its perceived stance in the Israel-Hamas conflict.
He is also devising a plan for China’s business, which has been severely affected by the economic downturn and fierce competition from competitors offering cheaper prices.
After having two-quarters of declining sales, Starbucks fired Laxman Narasimhan last month, its first-ever external CEO. Nicol is getting the power to direct the strategy from day one, unlike Narasimhan, who has to train for six months under Howard, the longtime leader who turned the coffee change into the largest in the world.
Investors are very hopeful about Niccol, given his two-decade restaurant executive at Yum! Brands Inc. and Chipotle Mexican Grill. He is recognised for restoring Taco Bell’s reputation and turning around Chipotle following some food safety issues.
Nicolle’s tasks are much more significant at Starbucks. While Chipotle serves customers only in the US, Starbucks is present in 87 markets worldwide. It also boasts a more complex menu with billions of combinations that usually overwhelm baristas.
Niccol will also need to calm down skeptical coworkers for Chipotle’s way of organising efforts and work arrangements that allowed him to stay in California while taking private jets to Starbucks HQ in Seattle.
The company has said that he will primarily be in Seattle, and the chain will carry on negotiating with baristas in good faith.