The new Starbucks boss has said he will simplify the chain’s “overly complex menu” in a bid to win back customers amid slumping sales.
Brian Niccol, who took over as CEO last month, said the chain needed to “fundamentally change” its strategy.
The company unexpectedly published its earnings report on Tuesday, showing that sales had fallen sharply for the third quarter in a row.
Sales in the US fell 6 percent as cash-strapped customers are increasingly put off by high prices and long wait times for drinks.
“Simplifying the menu can help solve the problem of cafes becoming more stressful and less attractive, but these are not the only issues at play,” Neil Saunders, Managing Director of GlobalData Retail, told DailyMail.com.
The new Starbucks boss has said he will simplify the chain’s ‘overly complex menu’ in a bid to win back customers amid slumping sales
“The main issue is that consumers are buying less coffee at Starbucks to save money,” he said.
Offering more promotions doesn’t seem to have worked, Saunders said, and the chain announced earlier this month that it was scaling back discounts offered through its mobile app.
“The other issue that is exacerbating the problem is that Starbucks has lost track on the added value it should be providing,” he added.
‘The cafes are too busy, the lines are too long, and too many of them are not pleasant places to be. “That means some people have defected to rivals, including independent chains.”
CEO Niccol said the company needed to address issues with staffing at coffee shops and the pricing of its drinks and food.
“People love Starbucks, but I’ve heard from some customers that we’ve strayed from our core, that we’ve made it harder to be a customer than it should be, and that we’re not communicating with them anymore,” he says. said in a pre-recorded video after announcing the latest earnings report.
“As a result, some are visiting less frequently, and I think today’s results tell the same story.”
“Starbucks is still a huge company, but the growth engine is no longer running and the company will need to rethink its proposition if it wants to make progress, especially in the North American market,” Saunders added.
Brian Niccol, who took over as CEO last month, said the chain needed to ‘fundamentally change’ its strategy
US sales fell 6 percent last quarter as cash-strapped customers increasingly deterred by high prices and long wait times for drinks
“The main issue is that consumers are buying less coffee at Starbucks to save money,” said Neil Saunders, Managing Director of GlobalData Retail.
It comes as stressed Starbucks workers have complained of chronic understaffing issues, leading to backlogs at coffee shops.
This is evident from an internal investigation BloombergOnly 33 percent of employees at the company’s 10,000 U.S. locations say stores consistently have enough employees.
“All we get is a skeleton staff all the time,” one worker said in comments collected as part of the investigation.
Employees asked Niccol about the issue at a companywide forum on his second day on the job, according to a transcript of the event seen by Bloomberg.
‘The team is already working on it. You are being listened to,” the new CEO said.
He promised to “empower” baristas to take better care of customers and, in an open letter later the same day, give them the “tools and time” they need to do their jobs.
Starbucks said it increased staff at 3,500 stores in the past year.
“Feedback from our partners shows consistent improvement in key areas of the Starbucks partner experience, which remains a priority for us as a company,” a spokesperson told DailyMail.com.
‘For example, partners are more likely to agree that they get the hours they want/need and that Starbucks offers competitive wages.
“We will continue to solicit feedback from partners in a variety of ways, including regular surveys and collaboration sessions to help us continually improve the partner experience.”
