Starbucks kicks off its annual Red Cup Day today (Nov. 13), marking the start of the holiday season. This year, customers can get a limited edition red cup with the purchase of a holiday beverage. However, the festive mood is being tempered by ongoing strikes at 65 US stores, organized by unionized workers. The strikes highlight the challenges facing CEO Brian Niccol’s turnaround plan for the iconoc coffee chain.
Niccol took over as CEO in September 2024 after leading Chipotle and Taco Bell. He is credited with restoring Chipotle’s reputation after the 2018 food safety crisis. Now, at Starbucks, he is tasked with reversing the company’s recent decline.
Niccol stepped into his role at a time when Starbucks was facing significant challenges. Foot traffic is down 10 percent by 2024, and Dencing’s decline has become an ongoing trend. Contributing to the depth of the architecture were features such as the insecure menu – included several meme-i-IPED new efforts, including stomach-ache in the dish-deceptive caused by olive-aurt-eturacting olive-auding situations caused by complex orders. Customers also point to a cold, reactive atmosphere that leaves them feeling disconnected from the brand.
“There is a shared sense that we have pulled out of our spine … Visiting Starbucks can feel like a bargain, the menu is amazing, these moments are opportunities.
With leadership in mind, niccol has vowed to bring the stars back to its roots as a community coffee. Under his leadership, Starbucks invested $500 million in additional human resources to improve customer service and working conditions. The company has simplified its menu, cutting more than a quarter of the food and drinks to reduce complexity. The stores have been redesigned to encourage longer visits, including more comfortable seating, ceramic mugs with barista-in notes, and handwritten baristas.
Despite these efforts, sales have remained flat during niccol’s first year. However, the latest quarterly results show signs of improvement. From June to September, revenue increased by 3 percent to $37.2 billion, and comparables increased by 1 percent. CFO Cathy Smith noted that this marked the first increase in sales in seven locations.
“These results show the significant progress we’ve made in our return to the Starbucks system,” Niccol said during the company’s fourth earnings call last month. “They show the first impact of our investment in customers, restocking, and an analyzed marketing strategy and menu.”
While some are seeing the first signs of success, others remain skeptical. Jason Tassie, founder of Know Your Business, says Starbucks is facing cultural challenges, especially with younger customers and more independent outlets. “Customers are looking for small players, local and community-run places,” he told the viewer. “Global chains are scrambling to replicate that.”
However, Starbucks’ strong loyalty program remains a key advantage for independent stores. Mia Unos, Clictoyant’s CEO, noted that while the company’s data-driven approach has been successful, it risks losing the brand’s customer touch. “You can’t find your data,” Manose told the defector. “But you can use data to create better experiences for people.”
