At Starbucks, sales fell less than expected in the first quarter. New CEO Brian Niccol’s strategy to get the coffee chain back on track seems to be yielding its first successes.
Back to basics
Starbucks reported a less sharp drop in comparable sales in the first quarter of its financial year than analysts had expected. Its revenue of 9.4 billion dollars (9 billion euros) represented a 4% drop, but still beat forecasts. Similarly, its per-share profit of 0.69 dollars was better than the expected 0.68 dollars.
CEO Niccol, who previously successfully transformed tex-mex chain Chipotle, wants to return Starbucks to basics. Among his first interventions are a simplified menu, the reintroduction of reusable ceramic cups and, above all, reducing long wait times. The target: less than a four-minute wait per order.
Some 100 million earned
Out of strategic considerations, Starbucks has also decided not to implement any further price increases in 2025, despite the sharp rise in coffee prices. Less popular, on the other hand, is the decision to allow only paying customers to use the seats and toilets in the coffee bars. “Although we are only one quarter into our turnaround, we are taking quick action within the ‘Back to Starbucks’ efforts and are seeing a positive response”, the top executive said.
The CEO himself draws particular attention because of his generous remuneration. Niccol received 96 million dollars (about 91.4 million euros) in his first four months at the company, largely in shares, and a 5 million dollar bonus after just one month in office. Earlier, he was criticised for continuing to live in Southern California and travelling by company jet to the Seattle headquarters.
