Starbucks CEO Brian Niccol shared more details about the company’s turnaround strategy during the company’s quarterly conference call on Wednesday.
For three straight quarters, Starbucks has reported declining sales. But the coffee chain is hoping that some easy tweaks to its U.S. business will pay off and help reverse the trend as it plots a more ambitious and comprehensive game plan.
Many of the coming changes are meant to help Starbucks achieve a smaller goal: delivering a customized drink to the customer in under four minutes. About half of current transactions are within that threshold, according to Niccol.
As Starbucks focuses on the turnaround, the company is also planning fewer new locations and renovations in fiscal 2025 to free up capital, CFO Rachel Ruggeri told investors on the call.
Shares of Starbucks were flat in trading Thursday after the company reported that its revenue fell for the third straight quarter.
Here’s how Niccol plans to help Starbucks’ sales rebound:
Ending the disorder of mobile order and pay
Starbucks customers have become used to walking into a cafe and seeing a counter crowded with mobile orders. Niccol wants to change that.
“When it works well, it’s great, but sometimes it can be a challenge for both customers and partners,” he told investors on the company’s conference call.
Mobile orders account for more than 30% of Starbucks’ U.S. transactions.
Niccol said Starbucks is working to improve the accuracy of the app’s timing, so customers know when their drinks are ready. Plus, he wants to better separate mobile order pickups from in-person ordering inside restaurants and curtail how much customers can customize their drinks.
“Right now, I think there’s some customization specifically in the mobile order app execution that’s just really wide and unnecessary,” Niccol told CNBC. “So I just think that we need to put better guardrails in place so that we get you access to customization that’s correct for the drink you’re ordering, and then also it allows our baristas to be more consistent with what they execute.”
