Starbucks CEO to rethink menu and pricing to win back customers

The new CEO of Starbucks has promised to simplify its “overly complex” menu and pricing after another slump in sales.

Brian Niccol admitted the coffee chain had to “fundamentally change” its recent strategy to win back customers.

“I believe that our problems are very fixable and we have significant strengths to build on,” he said in a video on the company website.

“We have a clear plan and are already taking quick action.”

Starbucks saw global sales slump 7% between July and September, its biggest decline since the Covid-19 pandemic. This was driven by a 6% sales drop in the US, the company’s largest market, and a 14% decline in China.

Niccol, who was brought in from Chipotle to turn things around last month, has promised changes to pricing and products to make sure customers feel Starbucks is “worth it, every time they visit”.

He said Starbucks would focus on supporting its baristas and make sure drinks were handed directly to customers. 

This included a pledge to make Starbucks “the best job in retail” by offering baristas “meainingful career growth” and the opportunity to earn a free four-year college degree.

Niccol said Starbucks needed to refine its mobile ordering system so it doesn’t “overwhelm the café experience” and re-establish its stores as a “community coffee house”.

The company has suspended its guidance for the full fiscal year 2025 but increased its dividend from 57 cents to 61 cents per share in a bid to drive investor confidence.

Niccol said: “People love Starbucks, but I’ve heard from some customers that we’ve drifted from our core. We’ve made it harder to to be a customer than it should be and we’ve stopped communicating with them. As a result, some are visiting less often, and I think today’s results tell that same story.”

Starbucks is the largest branded coffee chain in the world, with more than 39,000 stores, and 1,250 in the UK.

The coffee chain is due to release its full results next week.

Read more: Trouble at Starbucks: five ways its new CEO can turn the chain around