New Starbucks CEO Brian Niccol is on a mission to return the brand to what made it great, according to an open letter to employees, customers, and other stakeholders.
That strategy will center on bringing back Starbucks’ community coffee house identity, empowering employees, meeting customer expectations, and doing a better job of telling the brand’s story. The company plans to support Niccol’s vision with investments in technology that help customers, workers, supply chain, and off-premises platforms.
Niccol—whose tenure officially began on Monday—admitted the beverage giant has “drifted from our core.” He also noted that customer-employee relationships have become too transactional, with an overwhelming menu, inconsistent products, and long wait times. To his point, U.S. transactions fell 7 percent in Q2 and same-store sales dropped 3 percent. This was Starbucks’ worst performance outside of the pandemic or Great Recession and a much different look from October 2023 when traffic was positive. In Q3, comps fell 2 percent, including a 6 percent slide in traffic and a 4 percent rise in average ticket.
The CEO described these disappointing moments as an opportunity to improve.
“I’m making a commitment: We’re getting back to Starbucks,” Niccol said in the letter. “We’re refocusing on what has always set Starbucks apart—a welcoming coffeehouse where people gather, and where we serve the finest coffee, handcrafted by our skilled baristas. This is our enduring identity. We will innovate from here.”
READ MORE ON BRIAN NICCOL’S HIRE:
Starbucks Names Chipotle Leader Brian Niccol CEO and Chairman
Starbucks’ Hire of Brian Niccol Will Send ‘Ripples’ Through Industry
Here’s How Much Starbucks Will Pay Brian Niccol
Brian Niccol to ‘Supercommute’ Via Jet in Starbucks CEO Role
One of Starbucks’ biggest shifts will be reestablishing itself as a gathering spot. The company once prided itself on serving as a third place between work and home where many customers would spend hours working or meeting up with friends. According to CNN, founder Howard Schultz said in a 1995 article, “If you look at the landscape of retail and restaurants in America, there is such a fracturing of places where people meet. There’s nowhere for people to go. So we created a place where people can feel comfortable.”
But the advent of technology, drive-thru, and mobile ordering has changed that dynamic. The COVID pandemic—which forced customers out of the dining room for an extended period—only accelerated this movement. Fewer guests dwell inside Starbucks; instead, it’s more common to see customers standing near the mobile ordering counter waiting for their drink followed by a quick exit. During the third quarter, there were 33.8 million active U.S. Starbucks rewards members, up 7 percent year-over-year and up 3 percent compared to Q2. The brand fueled this digital movement by announcing plans to further diversify the portfolio with pickup, drive-thru-only, and delivery-only locations across the nation.
However, Niccol wants to elevate the in-store experience by making sure shops “reflect the sights, smells and sounds that define Starbucks.” This means more comfortable seating, thoughtful designs, and a clearer distinction between to-go and dine-in services.
“Our stores have always been more than a place to get a drink,” Niccol said. “They’ve been a gathering space, a community center where conversations are sparked, friendships form, and everyone is greeted by a welcoming barista. A visit to Starbucks is about connection and joy, and of course great coffee. Many of our customers still experience this magic every day, but in some places—especially in the U.S.—we aren’t always delivering.”
Another important pillar is putting strong efforts into marketing its coffee expertise and role in the community. Niccol said he didn’t want to let “others define who we are.”
The CEO is likely describing the brand’s issue last year with protests connected to the Israel-Palestine conflict. During the Q1 earnings call in January, former CEO Laxam Narasimhan said events in the Middle East had an impact domestically, fueled by “misperceptions about our position.”
The company experienced strong momentum from August through October, surpassing expectations. However, growth slowed starting in mid-November, with traffic dipping into negative single digits before recovering in December. This slowdown followed an incident in early October when Starbucks Workers United, the company’s union, tweeted support for Palestine. The tweet, which was later deleted, led Starbucks to file legal action, claiming the union’s use of the company’s image caused confusion, with customers mistakenly associating the union’s comments with the company itself.
Niccol sees “enormous potential for growth” in the Middle East. He added that Starbucks will work to “dispel misconceptions about our brand” and pursue expansion in “Asia Pacific, Europe, and Latin America, where the love for Starbucks is strong.” Also, the CEO wants to find a new path forward for the China market, where comparable store sales declined 14 percent in Q3, driven by a 7 percent decrease in both average ticket and comparable transactions.
The CEO’s other goal is to ensure employees are equipped with the right tools to craft accurate drinks that are personally delivered to each guest. Starbucks plans to back that up by making the company “the best place to work” with ample career opportunities and growth avenues. Additionally, he wants to make the brand operationally sound with consistently delivered food and drinks in the morning.
“My focus for the first 100 days is clear,” Niccol said. “I’ll spend time in our stores and at our Support Centers, meeting with key partners and suppliers, and working with our team to drive these critical first steps. Together, we will get back to what makes Starbucks, Starbucks.”
