In a high-stakes move Starbucks is betting big on its new boss Brian Niccol - paying him $113m (which is four-times more than his predecessor got) and letting him fly private between his California home and Seattle HQ
The coffee giants shares jumped up 25% when they announced Niccol would swap his burrito-making role at Chipotle for coffee-making duties in mid-08/24; however the real challenges are just starting to brew
The once-mighty chain is showing signs of weakness: sales dropped for three back-to-back quarters‚ with US stores seeing a 10% drop in customer visits (and dont forget about China where sales fell 14%). Even its loyal rewards-program members are walking away - dropping 4% in Q2/24
Niccolʼs first moves seem rather basic:
* Bringing back ceramic mugs
* Writing orders on cups with markers
* Getting rid of olive-oil coffee drinks
* Making stores more community-friendly
The chains problems run deeper than surface-level fixes can solve - with nearly 40k stores worldwide many cities are over-saturated with identical-looking shops serving same-tasting drinks. High prices dont help either: customers are finding better coffee at local shops for less money; while Starbucks keeps pushing its sugar-heavy $5 dessert-like drinks
It is clear we need to fundamentally change our strategy to win back customers
Yet his initial plans seem too simple for a business needing major changes - especially from someone getting paid such an enormous sum. The real question remains: can any amount of money fix what looks like a cooling coffee empire