Sept 10 (Askume) – New Starbucks Chief Executive Brian Niccol said he would focus on reviving the chain amid waning demand for high-priced cafe culture in the United States.
Last month, Starbucks unexpectedly named Niccol as CEO. He will replace Laxman Narasimhan, who was fired as the company’s sales declined for the second consecutive quarter this year.
In his first week on the job, Niccol said in an open letter that he would initially focus on delivering drinks and food on time to U.S. stores and improving the customer’s in-store experience in order to “reestablish the brand as a community café with a culture that’s rooted in its founding.”
The former CEO of burrito chain Chipotle Mexican Grill (CMG.N) says there should be a clear distinction between “carryout” and “carryout” service in stores.
Niccol said he will spend time in stores, meeting with suppliers and partners to improve the company’s supply chain and app and mobile ordering platform.
He wrote, “In some places — particularly in the U.S. — we may not always be able to deliver. It may seem like a one-time deal, the menu may seem dizzying, products may be inconsistent, and the wait may be long.
Starbucks implemented an alert system program at its U.S. company-operated stores this summer to improve speed of service, which also includes equipment upgrades.
Regarding its business in China, Niccol said Starbucks needs to “play to its strengths” in the market. Competition from more affordable brands has hurt Starbucks’ position in the market, with sales declining by double digits for two consecutive quarters.
In July, Narasimhan said after the financial performance was released that Starbucks is willing to consider strategic options for its business in China, including joint ventures and collaborations.
Niccol said Starbucks would work to “address misconceptions about the brand in the Middle East” as Western brands are affected by voluntary boycotts related to the Gaza War.
Starbucks has also been under pressure from activist investor Elliott Investment Management to restructure its business this year as the company’s sales have declined.
