Starbucks’ new chief has promised to simplify the company’s “overcomplicated menu” as the company tries to improve slumping sales and win back customers. Brian Nicol said the company needed to make “fundamental changes” and announced that the pricing structure would be rethought.
According to the latest data, consumers have cut back on spending as inflation has exacerbated financial difficulties, particularly in China. Nicol acknowledged that the company’s stores also had problems such as understaffing and overcrowding.
Starbucks did not specify whether this would apply in the UK for the menu changes and price revisions. However, according to company data, global sales fell by 7% between July and September. China, in particular, has seen a 14% drop in sales, as its economy continues to weaken.
“Despite our significant investment, we were unable to improve our customer base,” said Rachel Ruggeri, Starbucks’ chief financial officer. A few months ago, she had said that the company was showing signs of improvement.
To increase sales, Nicholl said, “We will bring back the original identity of Starbucks.” He also said, “We will simplify our very complex menu, improve our pricing structure, and ensure that every customer gets the right Starbucks service every time.”
He further explained, “We are going to improve the mobile ordering and payment system, as it adds stress to the cafe experience.”
Randeep Somel, fund manager at L&G firm, said the low cost and simple menu could help speed up service.
Nichol, who previously headed the Chipotle Mexican food chain, has been hired to revamp Starbucks. However, his plan to travel by corporate jet from his family’s home in Newport Beach, California to the headquarters in Seattle drew criticism.
Some critics on social media claimed that his actions were sending messages against the company’s green policies.
Starbucks will announce its financial results soon. Shares of the company fell 4% on Tuesday, as the company suspended its financial forecasts for next year, saying the current business conditions are volatile.
Former Starbucks CEO Laxman Narasimhan, who had to step down after a year and a half in the job, had tried to revamp the company’s menu. He planned to introduce new bubble tea drinks and egg sandwiches with pesto to the menu and tried to speed up service, but resigned after a few weeks.
Starbucks to the Israel- Gaza War and The union in the US is also facing protests and boycott campaigns on social media related to the fight. US Starbucks workers union posts message of Palestinian “unity” on social media after Hamas attack on October 7 had done.
The post was later removed, but it went viral and sparked a backlash against the company. Starbucks disagreed with the statement and said it strongly condemned the “violence in the province”.