New Starbucks CEO Brian Niccol Has a Turnaround Plan! Will it work?

In an open letter to employees and stakeholders, Niccol acknowledged that Starbucks has fallen short in meeting customer expectations, particularly in the United States.

He identified four key areas for improvement, including the barista experience, morning service, cafe atmosphere, and branding.

To address these challenges, Niccol plans to invest in technology to enhance baristas’ working conditions and speed up drink preparation. Additionally, he will focus on improving the company’s supply chain efficiency and upgrading the Starbucks app and mobile ordering platform.

Falling Sales In US and China

After stabilizing the U.S. business, Niccol will shift his attention to international markets, beginning with China, Starbucks’ second-largest market. The coffee chain has faced challenges in China, including the impact of the Covid-19 pandemic and increased competition. Niccol aims to develop a strategy to regain market share and capitalize on growth opportunities in this dynamic market.

In the Middle East, Niccol seeks to address misconceptions about the Starbucks brand, which has been impacted by boycotts related to U.S. foreign policy. He will focus on improving the company’s reputation and fostering positive relationships with local communities.

Niccol’s appointment as CEO comes after Starbucks experienced declining sales and leadership changes. His experience at Chipotle Mexican Grill, where he successfully turned around a struggling chain, positions him well to lead Starbucks’ turnaround.

Riding on his success from Chipotle Mexican Grill, it remains to be seen whether Brian succeeds in delivering a successful turnaround in a similar industry yet a different business segment.