Starbucks pushes new strategy as sales drop across U.S.
“We must reestablish ourselves as the community coffeehouse,” said Starbucks’ new CEO Brian Niccol.
SEATTLE, Wash. — During Fiscal Q4, transactions at Starbucks dropped across U.S. stores, with a 10% reported drop.
Now, after the steep slump, the new CEO of Starbucks, Brian Niccol, is sharing a business strategy and marketing campaign he’s calling “Back to Starbucks.”
“To welcome all our customers back and return to growth, we need to fundamentally change our recent strategy. ‘Back to Starbucks’ is that fundamental change,” said Niccol.
The Seattle-based coffee giant’s top boss said he is convinced that the answer to turning things around lies in a revival of the coffeehouse culture Starbucks used to be known for.
He continued, “People love Starbucks. I’ve heard from some customers that we’ve drifted from our core, that we’ve made it harder to be a customer than it should be, and just not communicating with them. As a result, some are visiting less often.”
Coffee drinker Kennedy Robinson told KING 5 Monday, “I don’t go as often anymore because it’s quite expensive… I’ve been going to Starbucks less frequently because I’ve started to make more coffee at home.”
She said she used to go “all the time” when she was a student, but that– just in the last year– her habits shifted.
“I bring instant coffee to my office now and just kinda make it at my desk,” Robinson said.
Robinson said she cannot justify a coffee that ends up being $7 or $8 at the register; others we spoke to said their habits changed in recent years because it has become “too big of a chain.”
“There’s Starbucks across from the Starbucks,” said Jeremy Miller. “That just seems kind of crazy, right?”
In the past, members of Starbucks Workers United, the labor union representing Starbucks baristas, have repeatedly expressed concerns about livable wages and staffing.
In a recent letter to the union, Niccol said, “Starbucks has a strong track record, leading the industry with competitive pay.” He that he is “committed to continued improvement.”
“We have worked hard to foster a productive relationship with the union built on mutual respect,” said a spokesperson for Starbucks Monday.
Niccol also stated recently that he wants to address staffing levels in stores, reduce bottlenecks, and “refine mobile order and pay, so it doesn’t overwhelm the café experience.”
“Combined with a welcoming coffee house experience created by our Green Apron partners (employees), we will remind people of why they love Starbucks,” said Niccol. “We must reestablish ourselves as the community coffeehouse.”
The new CEO said he wants to make Starbucks both a gathering place for customers and “the best job in retail,” offering baristas “meaningful career growth and industry-leading benefits” like the opportunity for U.S. employees to earn a free four-year college degree.
More details on his “Back to Starbucks” business strategy are expected on Wednesday.
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