Starbucks is continuing its aggressive transformation strategy to win back customers, with CEO Brian Niccol reportedly preparing to announce further changes aimed at enhancing the customer experience this Thursday.
Building on Recent Momentum
The popular coffee chain has already implemented significant operational shifts in recent months, showing no signs of slowing down its reform agenda. Under Niccol's leadership since September last year, Starbucks has focused on creating more customer-friendly environments and improving service quality through enhanced worker training programmes.
These efforts are beginning to yield tangible results, with The Wall Street Journal reporting record sales from the franchise's holiday promotions and company shares rising by 16 percent so far this month.
Customer-Centric Reforms Already Underway
Niccol has already committed to several key improvements, including making it easier for customers to pick up drinks, ensuring more meaningful communication with patrons, and preventing locations from running out of food items. The company has invested millions of dollars in practical improvements, such as fixing broken plug sockets across US stores.
Employee training has become a central focus, with special sessions this month emphasising the importance of welcoming every customer, maintaining eye contact, and delivering orders with genuine smiles. Baristas are now expected to write thoughtful messages on to-go cups rather than using simple expressions or smiley faces.
Operational Restructuring and Future Vision
The company is undergoing significant operational changes, including plans to expand the number of stores in the US after a reduction of approximately 400 locations since last year. In July, Niccol announced development of a prototype "coffeehouse of the future" featuring 32 seats and a drive-through facility, with these new stores designed to be smaller and more cost-effective to build.
Service speed has become a priority, with targets set to fill both in-store and drive-thru orders within four minutes, supported by investments in new technology. The company has also decided to eliminate mobile-order and pick-up only stores, deeming them "overly transactional" and lacking in warmth.
Pricing Strategy and Market Challenges
Despite customer concerns about high costs being a primary reason for reduced visits, Starbucks has maintained its current pricing structure under Niccol's leadership, though future price increases haven't been ruled out. The company stated in October that it would monitor customer reactions to any potential price adjustments carefully.
The Wall Street Journal notes that while Starbucks's profit margins declined last year, they could improve in the coming year if significant import tariffs on coffee are removed. When Niccol assumed leadership last summer, the company faced declining sales that had persisted for six consecutive quarters, though he expressed optimism about the turnaround.
"While our financial results don't yet reflect all the progress we've made, the signs are clear — we're gaining momentum," Niccol remarked at the time, indicating confidence in the ongoing transformation strategy.
