Starbucks’ new CEO is making big changes in hopes of winning back customers and perhaps getting them to spend some time in the cafe again.
Brian Niccol, who joined Starbucks as chairman and CEO in September, has big plans for the coffee chain. He wants to get back to what he considers the basics: a good cup of coffee, served quickly in a welcoming environment.
Since taking over the brand, Niccol has announced a long list of priorities, collectively referred to as his “Back to Starbucks” plan, which aims to (re)establish Starbucks as a community coffeehouse.
Starbucks, once called America’s living room, has made major changes in recent years, especially during the pandemic, to prioritize mobile, drive-thru and takeout orders. The cafe removed the condiment bar, moved creamers and sweeteners behind the counter, and reduced seating, in many cases replacing comfy sofas with stools and chairs without cushions.
The message this sent, at least to some customers, was: take your drink and leave. In an earnings call on Oct. 30, Niccol acknowledged that the strategy wasn’t working and that the company’s finances were sluggish as a result. Starbucks sales declined for the third quarter in a row. In the quarter, sales at locations open at least a year (called same-store sales) fell 7%, and U.S. store traffic fell 10%.
“It’s clear that we need to fundamentally change our strategy to win back customers,” Niccol said.
Here’s what coffee lovers can expect from Starbucks in the coming weeks and months.
1. Simplified menu
One of the key principles of Niccol’s plan is to simplify the Starbucks menu. That means refocusing on menu staples like brewed coffee, lattes, iced coffees, flat whites and shaken espresso.
Of course, Starbucks is known for customizing its drinks with flavored syrups, creamers, and other add-ons. Many of them will remain, but eventually there will be fewer options for basic drinks.
“We plan to pare down our menu to align with our core identity as a coffee company,” a spokesperson told Money.
The company has already announced that it will discontinue production of Oleato drinks, which are a mixture of olive oil and coffee. Additionally, Starbucks tells Money that it plans to phase out all iced energy drinks in the coming months. (These are carbonated iced teas in a variety of fruit flavors.)
Starbucks says its first focus is on trimming its drink menu. Food will likely follow.
2. No premium for non-dairy milk.
From Thursday, non-dairy milk will no longer cost more. Starbucks used to charge 60 to 80 cents for coconut, almond, oat or soy milk (while dairy milk was free).
Starbucks says that besides the extra shot of espresso, the most popular option was non-dairy milk. Now, about half of customers who pay for a drink inoculant could see a price reduction of 10% or more if they choose non-dairy milk, Niccol said.
Stopping price increases on non-dairy milk is part of a broader strategy to make Starbucks feel like it’s “worth it,” Niccol said on the earnings call.
The company also says it has no plans to increase prices in 2025.
3. Return seasoning
During the pandemic, Starbucks got rid of condiment bars that once contained cream, sugar and other additives in drinks so customers could grab them as needed.
Many other coffee and beverage stores did the same in the early days of the Covid-19 crisis for health reasons. But Starbucks never brought it back.
On Reddit, customers and workers often complain about the bar’s removal, saying that waiting (or skipping) the line for the barista to add some milk is time-consuming. Niccol apparently agrees.
“We plan to return condiment coffee bars to all of our cafes by early 2025,” he told investors. “It’s a great customer experience that will help improve speed of service.”
4. Names on cups again
Another COVID-19 related change the company made was to stop writing customer names on the cups. More than four years later, the practice is still on pause.
This seems like a small change, but it could mean something much bigger: one less interaction with your barista could result in a worse relationship with Starbucks overall (and therefore lower profits).
Niccol said he wants to bring back names and markings on to-go cups to make ordering coffee more personalized.
“We’re going to get back to it. We’re tracking Sharpies,” he said during a recent interview with CNBC, adding that the company plans to order about 200,000 markers.
5. More welcoming environment
Starbucks wants to become the “third place.”
The idea of a third place is a physical space where you can just hang out, but it’s not your home or workplace. Before the pandemic, Starbucks was sometimes called “America’s living room,” referring to a place where people could hang out for hours.
In recent years, many Starbucks stores have redesigned their cafes with fewer sofas and comfy chairs. On social media, shoppers often complain about the lack of space and say it feels like stores are actively trying to get people to leave.
“I don’t see people hanging out in these places anymore, reading, doing homework, writing, etc.,” one Redditor wrote last December. “Is this a trend now for Starbucks: mobile-only locations and drive-throughs that are not recommended for hanging out?”
In an effort to make Starbucks feel like a community coffee shop again, Nichols outlined several changes, including serving drinks in ceramic mugs and adding more comfortable seating. Newspapers, which disappeared from Starbucks locations in 2019, may also return as part of a strategy to entice people to spend more time in the cafe.
“We’re reclaiming third place,” Niccol said, “so our cafes feel like the welcoming coffee shops our customers remember.”
6. Separate mobile sections for issuing orders.
In recent years, Starbucks has encouraged mobile ordering, where customers can select a drink and pay for it in the app, then skip the line at the store to pick it up.
But in practice, this can lead to bottlenecks, especially if baristas are already busy taking orders at the counter and display. The situation can quickly spiral and a crowd of people end up gathering around the drinks counter.
Starbucks says it will soon redesign its stores by separating the mobile ordering section from the barista counter. Niccol said the company will also be installing barriers for mobile ordering to keep stores from being crowded during peak hours.
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