New Starbucks Chairman and CEO Brian Niccol wants customers to have their orders hand-delivered by a barista in four minutes or less, a goal that will be central as he tries to revive the company’s sagging sales.
“We have to make it easier for our customers to get a cup of coffee,” Niccol said in his first conference call with investors since joining Starbucks in September.
Niccol said about half of the company’s jobs are completed in four minutes or less. He wants to focus on the problems that slow down the other half, from rush-hour staffing to slow ovens to the overly complicated Starbucks menu.
“When you start using that metric, you quickly find out where our stores are having a real problem,” Niccol said. “We’re going crazy following it.”
Niccol said Starbucks will start with quick service at the counter, with mobile orders and drive-thru orders to follow.
Niccol said Starbucks needs to reduce its food and beverage offerings so baristas can focus on doing fewer things consistently.
First on the chopping block: Starbucks’ Oleato olive-oil drinks, which will be phased out at many locations starting in early November. They will still be available in certain locations in Italy, Japan and China.
The decision breaks a link to longtime Starbucks leader Howard Schultz, who came up with the Oleato idea after visiting an olive oil producer in Sicily. Schultz called this drink a “revolutionary idea” when he launched it in Italy in early 2023. We went on sale in the US earlier this year.
Niccol also said that the process of customizing drinks should be easy. Currently, the company offers dozens of ways to customize each drink, which confuses customers and sometimes forces baristas to create a less-than-ideal drink.
On Wednesday, Starbucks made its first attempt to simplify the customization process by saying it would stop charging extra for using non-dairy beverages in its drinks. Starting November 7, when the Starbucks holiday menu will be launched, customers will be allowed to choose soy milk, oat milk, almond milk or other types at no additional cost.
Starbucks said replacing dairy milk with plant milk is the second most requested item at its store after adding a shot of espresso. But the charges can include. At a Starbucks in Michigan on Wednesday, it cost 70 cents to switch to almond milk for a medium Pumpkin Spice Latte.
Starbucks said it will reduce the number of new stores and planned renovations next year to allow time to consider store remodeling.
Niccol said it’s important for Starbucks to return to the community coffee place it once was. Stores will bring back ceramic mugs for in-store customers and Sharpie pens so baristas can write a message on a customer’s order. The stores will have comfortable seating and separate areas for taking mobile orders.
“I want you to feel like you’ve entered a special place,” said Niccol.
Niccol’s comments came as Starbucks reported a disappointing end to its 2024 fiscal year. Starbucks said revenue fell 3% to $9.1 billion in the July-September period as customer traffic declined in the US and China. For the full year, Starbucks said revenue rose less than 1% to $36 billion.
The Seattle-based coffee giant released bad financial news last week and said it would suspend financial guidance for its 2025 fiscal year to give Niccol time to evaluate the business.
-Dee-Ann Durbin, AP Business Writer
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