Our old buddy Brian Niccol was confirmed this week as Starbucks’ new chief executive. Now he’s pursuing a big new plan to completely change the company’s direction and attitude. His appointment marks a real departure for the coffee behemoth. Artwork by Isabela Murguia Niccol would be the fourth of these leaders in under three years! Indeed, in the summer of 2024, he was lured away by Chipotle Mexican Grill. His arrival is Little Caesars’ largest executive deal in U.S. corporate history, including a sign-on pay package valued at up to $113 million—four times the size of his predecessor’s pay package.
Since taking the helm, Niccol has promised to “fundamentally change” Starbucks’ strategy to earn back consumers. So far he has pinpointed the company’s “overly complicated menu” and value pricing strategy as his two biggest focuses. This vision would prioritize customer experience by staffing facilities and improving training instead of jumping straight to automation.
The recently appointed new CEO admitted that past attempts to cut workers at Starbucks stores haven’t achieved the intended outcomes. “Over the last couple of years, we’ve actually been removing labour from the stores, I think with the hope that equipment could offset the removal of the labour,” Niccol stated. He pointed out that just ramping up the new automation doesn’t fill the most fundamental requirement of today—that of a customer-friendly experience.
“Equipment doesn’t solve the customer experience that we need to provide, but rather staffing the stores and deploying with this technology behind it does.” – Brian Niccol
In response to customer feedback and operational challenges, Niccol is exploring ways to bake fresh items and assemble certain products at scale within Starbucks locations. He’s gone further in making that expansion a reality by expanding a pilot program. With this initiative, Starbucks hopes to increase numbers to about 3,000 across Starbucks’ 36,000 coffee shops globally.
Even with these initiatives, Starbucks lost more business than expected in the first fiscal quarter of Niccol’s reign. He criticized these results as “disappointing.” As shown in the deep dive above, he pointed to strong increases in foreign markets such as China and Canada, which balanced out some of the U.S. weakness.
As he works on his turnaround plan for Starbucks, Niccol faces the daunting task of revitalizing a brand that has struggled with operational complexities and evolving consumer expectations. The coffee chain’s future may yet rest on his big ideas, and he’s got major technology to manage. He will need to reestablish a culture of great, proactive customer service.