Starbucks Shakes up Menu
Starbucks Shakes up Menu to Win Back Customers
The new boss of Starbucks has promised to simplify its “overly complex menu” as the coffee chain attempts to win back customers and boost falling sales. Brian Niccol said the company needed to “fundamentally change” and said it would review its pricing.
Figures revealed that Starbucks’ customers have cut back on spending as the rising cost of living squeezed budgets, particularly in China. But Mr Niccol also admitted that there were issues in its stores such as not enough staff and customer bottlenecks.
Starbucks refused to confirm or deny whether menu changes and price adjustments will apply to the UK.
The BBC news service is reporting that the company has said global sales tumbled by 7% between July and September. The downturn was more dramatic in China, where sales fell 14% for the same period, as the economy there falters. “Despite our heightened investments, we were unable to change the trajectory of our traffic decline,” said Rachel Ruggeri, Starbucks’ finance chief.
Months earlier, she had said the company was seeing signs of revival.
To improve its slowing sales, Mr Niccol pledged to “get back to Starbucks”.
“We will simplify our overly complex menu, fix our pricing architecture, and ensure that every customer feels Starbucks is worth it every single time they visit,” he said. He added: “We need to refine mobile order and pay so it doesn’t overwhelm the café experience.”
Randeep Somel, fund manager at financial services firm L&G, said a cheaper and less complicated menu could help speed up service. “At peak times, the queues are just too large so if you simplify the menu it might help customer throughput,” he told BBC Radio 4’s Today Programm
Mr Niccol, who previously headed the Mexican food chain Chipotle, was brought into Starbucks to help turn the business around.
But he faced criticism over his plan to commute almost 1,000 miles (1,600km) from his family home in Newport Beach, California, to the firm’s headquarters in Seattle on a corporate jet.
Critics saw it as in contradiction with the company’s public stance on green issues.
Starbucks is due to release its full results next week. It shares dropped 4% on Tuesday as it suspended its financial forecasts for the next year due to “current state of the business”.
Starbucks’ former chief executive Laxman Narasimhan, who was ousted after a year-and-a-half in the role, had attempted to revitalised the chain’s menu. He said in summer he wanted to add new items such as boba drinks and an egg sandwich with pesto as well speedier service in stores. However, weeks later he left.
Starbucks has also been grappling with protests and boycott campaigns on social media tied to the Israel-Gaza war and a union fight in the US.
A union working to organise baristas in the US posted a message on social media expressing “solidarity” with Palestine, shortly after the 7 October attack by Hamas. The post, which the union said was not authorised by leaders, spread rapidly despite being taken down, and sparked backlash against the coffee giant.
Starbucks said it disagreed with the union’s statement. It described its official position as condemning “violence in the region”.
