Starbucks' new CEO vows to make chain's cafes "inviting places to linger"
Brian Niccol prepped for his new gig as chief executive of Starbucks by visiting some of the coffee chain's more than 17,000 U.S. stores, finding a "shared sense that we have drifted from our core."
In an open letter posted Tuesday, the former Chipotle CEO said he would work to reestablish the caffeine purveyor as the nation's "community coffeehouse," an ambiance that seemingly got lost in the shuffle during the pandemic, as the company devoted itself to fulfilling to-go orders from its mobile app.
Niccol stepped into his new role on Monday, weeks after Starbucks ousted Laxman Narasimhan, whose 18-month stint at Starbucks' helm was marred by sluggish sales, a declining stock price and fading appeal for the company, particularly among Americans.
"In some places — especially in the U.S. — we aren't always delivering," Niccol said. "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's letter "has a back-to-basics quality about it," noted Neil Saunders, managing director, retail, at GlobalData.
"There is a very clear recognition that Starbucks has strayed from its core purpose and is not satisfying customers in the way it once did. Brian Niccol wants to remedy those issues and go back to the 'good old days' of Starbucks. Of course, saying this is easier than doing this," the analyst relayed.
Wall Street has so far embraced Niccol's appointment, with Starbucks shares rising about 18% since he was tapped for the role in mid-August. The stock on Tuesday was up 1.2%, or $1.13, at $93.34, outperforming the broad market, with the S&P 500 up 0.5%.
A restaurant executive for 20 years, Niccol is seen as having brought Taco Bell's image back to life and for turning things around at Chipotle after a series of food-safety issues.
Niccol's agreement with Starbucks has him traveling nearly 1,000 miles from his home in Newport Beach, California, to the company's Seattle headquarters by corporate jet three days a week, an arrangement critics find to be at odds with Starbucks' claim of being a leader in environmental sustainability.