Starbucks’ new Chairman and CEO Brian Niccol aims to have customers receive their orders hand-delivered by a barista within four minutes or less. This goal is crucial as he attempts to reinvigorate the company’s sagging sales. Niccol stated in his first conference call with investors since joining Starbucks in September that they must make it easier for customers to get a cup of coffee. Around half of the company’s transactions are currently completed in four minutes or less. Niccol plans to focus on addressing the bottlenecks that delay the other half, including inadequate staffing during rush periods, slow ovens cooking food, and Starbucks’ overly complex menu. Niccol said, ‘When you start to use that metric, you quickly discover where our stores have a real problem. We’re going to be maniacal about getting after it.’
Starbucks CEO, Kevin Niccol, has set a goal to reinvigorate the company’s sagging sales by streamlining service. He announced that Starbucks will prioritize faster service at the counter, with plans to extend this efficiency to mobile and drive-thru orders.
Niccol believes that reducing the variety of food and drink options will allow baristas to focus on delivering a smaller number of products consistently and with higher quality. This strategic move will begin with the discontinuation of Starbucks’ Oleato olive-oil infused beverages in most locations starting early November. However, these beverages will remain available in select locations in Italy, Japan, and China.
The decision to discontinue Oleato marks a departure from the legacy of former Starbucks leader Howard Schultz, who conceptualized the idea after visiting an olive oil producer in Sicily. Schultz had labeled the beverage as a “transformational idea” when it was first introduced in Italy in early 2023, and it was later launched in the U.S. earlier this year.
Niccol also emphasized the need for a simpler process for customizing drinks, aiming to enhance the overall customer experience.
Currently, Starbucks offers numerous ways to customize every drink. This confuses customers and sometimes leads baristas to prepare drinks in a less than ideal manner. On Wednesday, Starbucks took the first step to simplify the customization process by announcing it will no longer charge extra for using non-dairy beverages in its drinks. From November 7, when Starbucks’ holiday menu is set to be introduced, customers can choose soy milk, oat milk, almond milk, or other varieties at no additional cost. Starbucks stated that substituting plant-based milk for dairy milk is the second most requested customization in its stores after adding a shot of espresso. However, these charges can accumulate. At a Starbucks in Michigan on Wednesday, it cost 70 cents to switch to almond milk in a medium Pumpkin Spice Latte.
Starbucks reported a disappointing end to its 2024 fiscal year. Revenue fell 3% to $9.1 billion in the July-September period as customer traffic slowed in the U.S. and China. For the full year, revenue rose less than 1% to $36 billion. The company said it will reduce the number of new stores and renovations planned over the next year to consider a store redesign. Niccol, the CEO, emphasized the need to get Starbucks back to being a community coffeehouse. Stores will bring back ceramic mugs for in-store customers and Sharpie pens for baristas to write messages on orders. They will also have more comfortable seating and separate areas for mobile order pickups. ‘I want you to feel like you’ve walked into a special space,’ Niccol said.
Seattle-based coffee giant Starbucks has recently announced disappointing financial results. In response, the company has decided to suspend its financial guidance for the fiscal year 2025. This move will allow CEO Kevin Johnson, who is also a former Taco Bell executive, to thoroughly assess the business and implement strategies to revive lagging sales. Johnson has set a new service goal, aiming to serve customers within four minutes to enhance the customer experience and potentially boost sales.
