Starbucks is the largest coffee company in the world with 38,000 locations worldwide. The first shop opened in 1971, and since then the Seattle-based coffee company has grown exponentially. However, sales have plummeted in the last year.
Even though Starbucks is considered a fast-food chain, their prices are much more expensive than competing coffee chains such as Dunkin’ Donuts. Instead of paying $5-7 for a coffee, consumers have resorted to making their specialty coffee drinks at home. This has ultimately caused Starbucks’s sales to drop 3-4% in the last quarter.
Sly Vilaivanh (10) occasionally gets Starbucks after school.
“I really like the caramel ribbon crunch Frappuccino from Starbucks, but I’d rather just get one from McDonald’s for much less,” Vilaivanh said.
Starbucks is also facing issues with locations overseas. In China, sales have dropped 14% due to a more popular coffee chain called Luckin Coffee. Chinese consumers complain about the same problems facing U.S. stores such as high prices and unsatisfactory customer service.
When former Starbucks CEO, Michael Conway, retired after 11 years with the company, Brian Niccol stepped up to the plate. Niccol was the previous CEO of Chipotle Mexican Grill, Taco Bell and Pizza Hut. He was able to transform these companies of depleting sales into thriving corporations that are both popular with consumers and Wall Street. Niccol began meeting with customers and workers at stores starting in 2023 and as an avid Starbucks consumer himself, he knew he would be perfect for the job.
When Brian Niccol first became CEO, he addressed Starbucks workers in a letter. “In some places — especially in the U.S. — we aren’t always delivering. It can feel transactional, menus can feel overwhelming, product is inconsistent, the wait too long or the handoff too hectic. These moments are opportunities for us to do better,” Niccol said.
Niccol’s main goal to improve sales is by “reestablishing the brand as the community coffeehouse” which includes improved customer service and a focus on coffee rather than teas or energy drinks. The plan is for stores to practice the Siren Craft System, where baristas make drinks in a quicker and more orderly fashion.
Although drive-thru and mobile orders take up 70% of all sales, Niccol plans to better the atmosphere of the indoor cafés. There will be a redesign with comfortable seating, and a mindful layout that allows customers to study, catch up or collaborate.
Taylor Coggins, a teacher at SHS, is a loyal Starbucks customer and is excited about the upcoming changes.
“Brian Niccol has fresh eyes and seems to want to take Starbucks back to its roots as a comfortable coffeehouse that allows people to ‘linger longer’,” Coggins said.
