Key Takeaways
- Brian Niccol this week took over as Starbucks’ new chief executive officer after holding the same role at Chipotle Mexican Grill.
- In an open letter to employees and customers, Niccol said the coffee chain needs to get “back to Starbucks.”
- Niccol said Starbucks locations need to be more welcoming, with a clearer distinction between “to-go” and in-person service.
New Starbucks (SBUX) Chief Executive Officer (CEO) Brian Niccol has laid out a plan for his first 100 days on the job, with an emphasis on bringing the coffeehouse chain back to its roots.
The new CEO in a letter on Tuesday to employees and customers — it was published online — acknowledged that Starbucks locations can become hectic, particularly when its baristas are overwhelmed with mobile orders. Niccol said stores will have a clear distinction between “to-go” and “for-here” service, which he billed as part of “getting back to Starbucks” as a community coffeeshop.
“There’s a shared sense that we have drifted from our core,” Niccol wrote. “We have an opportunity to make the store experience better for our partners and, in turn, for our customers.”
Niccol joined the coffeehouse giant this week after announcing his departure from the top job at Chipotle Mexican Grill (CMG) last month. Starbucks is looking to turn around the performance of its recent disappointing quarters, and Niccol faces a challenging consumer spending environment.
Same-store sales have declined in Starbucks’ two most recent quarters as Americans have cut discretionary spending while facing higher prices for essentials.
Presence in China
Investors have been watching for updates on the company’s China strategy after same-store sales in the country dropped by 14% year-over-year last quarter. Niccol said he intends to focus primarily on the U.S. market early in his tenure, but he hinted in his letter at international plans as well.
“In China, we need to understand the potential path to capture growth and capitalize on our strengths in this dynamic market,” Niccol said in his letter. China, together with the U.S., comprises 61% of Starbucks’ business.