Starbucks CEO Brian Niccol, who took over in September, is initiating a significant shift in the company’s strategy to regain customer interest. During an investor call, he acknowledged that past efforts to reduce staff in favor of automation backfired, stating that the expectation of equipment compensating for fewer employees was incorrect.
As part of this new approach, Starbucks plans to hire more baristas, increase staff hours, and reduce reliance on automated systems like the Siren Craft System, which was meant to streamline drink preparation. Niccol’s leadership comes with a hefty compensation package and aims to simplify an “overly complicated menu” while addressing rising costs and declining customer traffic.
Despite these initiatives, Starbucks faced a 1% drop in global sales over the first three months of the year, marking five consecutive quarters of decline. Niccol expressed disappointment but noted that sales increased in markets like China and Canada. Initiatives such as personalized customer service and enhancing the in-store experience, including handwritten notes and the use of ceramic cups, have been implemented to boost customer satisfaction.
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