When Starbuck’s new CEO laid everything on the table, it made stark sense. The premium coffee giant was suffering from stagnant, even sinking sales. So, the ‘Back To Starbuck’s’ action plan was born. But will it be enough to turn the chain around?
There were indications that Starbuck’s was close to hitting a wall. Same-store year-over-sales were either flat or falling at a significant number of locations…
A classic 2000s conundrum
The reasons were many and varied…
Coffee prices continue high, and are likely headed higher, for at least the next year. At the same time, Starbuck’s fans have been grousing about the price of the chain’s fancy, higher-end bever-ages. Some are now stickered at $6 or more.
But the chain’s new CEO also flagged some business model issues which blind-sided the chain as it struggled to meet the challenges the Fast Food sec-tor was throwing at it in a market un-dergoing some massive, fundamental shifts.
So the board decided to replace Star-buck’s CEO with Brian Niccol – the guy who turned around Chipotle after it sank to historic lows following a series of food poisoning incidents and bus-iness model traps. Including, a bloated menu and ingredient inventory. Not to mention service issues stemming from a stressed-out staff.
Perfect guy for the job
… All of which pointed at Niccol as the perfect guy for the job of turning Starbuck’s around.
But the new CEO dug even deeper into the complex web of snags and SNAFUs that he say ailing Starbucks. The pioneering premium coffee chain, his fresh, outside-in vision saw, was also suffering from an identity crisis. A lot of people inside the organization were just too lose to see the forest for the trees.
Starbuck’s, Niccol realized, had lost its way, and it’s original, basic, appeal. A change in atmosphere – in combination with a change in its historic ‘neighnourhood hangout’ feel – made the place seem unfriendly to its core fans.
Hold on tight…
Niccol laid the groundwork this past week for the resurrection of Starbucks, calling for a whole laundry list of changes. Foremost among them, he’s promising to streamline the menu, and restore the classic, friendly, relaxed atmosphere.
Which is not to say he’s abandoning plans to address the kind of evolutionary moves other Fast Food joints are embracing. He hasn’t said he’ll abandon plans to accommodate more drive-thru and take-out traffic. Nor, apparently, will he slacken off on the drive to convince the chain’s fans to acclimate to the digital future, as represented by smart phone ordering and payment systems.
He has, however, pointedly committed to giving non-loyalty program members more love. They had been complaining bitterly that they were being neglected by the chain’s focus on enticing folks to join the loyalty plan by offering too many members-only specials and promotions…
My take
I see Niccol as a guy who can, indeed, turn things around for Starbuck’s. The issues he’s facing at the Sign of the Green Lady are nothing compared to some of the challenges the Chipotle’s assignment threw at him. But the Starbuck’s situation is… more delicate. And I wonder if his characteristic style – making big, bold moves to solve clear-cut, materially-rooted problems – will do the job on more-etherial ills such as in-store atmosphere and customer experience dissatisfaction. Not to mention the mirror-images of those factors: employee ‘comfort’ and job satisfaction.
My questions to you…
Do you think Niccol can turn Starbucks around?
Does he have the light touch it takes to deal with the brand’s less material, more ethereal issues?
If you’ve been dissatisfied with the Starbuck’s ‘experience’ lately, do believe the ‘experience’ you want – indeed, expect – can be restored, as Niccol promises?
Muse on that…
~ Maggie J.