New Starbucks boss to shake up ‘overly complex’ menu to win back customers

  • 10/23/2024
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The new boss of Starbucks has pledged to shake up its “overly complex menu” in an effort to turn around the struggling coffee chain. Brian Niccol, who joined the company as chief executive in September, said Starbucks needed to “fundamentally change” its strategy in order to win back customers. The coffee chain reported falling sales, revenue and profit in the fourth quarter, amid weak demand in its US home market and in China, highlighting the challenges facing its new boss. In a video message, Niccol said he had heard from customers that the chain had “drifted from [its] core” and were visiting less often. “To welcome all our customers back and return to growth, we need to fundamentally change our recent strategy,” he said. He added that the company would simplify its “overly complex menu”, and change its pricing strategy so that customers felt “Starbucks is worth it”. Customers have turned their backs on Starbucks’ pricey drinks as they rein in their spending. Starbucks’ blended coffees and Frappuccinos including syrups and flavourings are some of the chain’s most expensive drinks, which can cost more than £6 for a large cup. The chain’s global sales slid by 7% in the three months to the end of September, while profits will be 25% lower than in the same period a year earlier. Sales at US branches were 6% lower in the past three months, while they tumbled by 14% in China. Starbucks shares fell by about 4% in after-hours trading on Tuesday. However, the stock has gained almost 28% since the company named Niccol as its new CEO in August, when he was poached from the Mexican food chain Chipotle. Niccol has already faced criticism since it was revealed that Starbucks had told him he could commute by private jet from his home in Newport Beach, California, to its headquarters in Seattle, instead of relocating. Starbucks appointed Niccol in a surprise management shake-up, ousting Laxman Narasimhan from the top job after only 17 months. Niccol was offered one of the biggest executive deals in corporate history to switch jobs, worth up to $113m (£88m), and four times larger than that of his predecessor. In its offer letter, Starbucks informed Niccol that he would be allowed to work remotely from his home in California some of the time. However, the company has said he would need to work in the Seattle office at least three days a week, in line with the company’s hybrid work policies. Starbucks has also suspended its annual outlook for the year to September 2025, given the new chief executive and the “current state of the business”.

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