Brian Niccol’s Starbucks makeover is still brewing

Starbucks CEO Brian Niccol just hit his one-year mark heading the coffee house, but his turnaround plan is still a work in progress. The Chipotle veteran was brought in last year with a ~$100 million pay package.

Niccol became Starbucks’ fourth CEO in two years as the company faced declining US sales, rising competition from low-cost rivals, and operational inefficiencies. 

Operational changes and challenges
He pledged to bring Starbucks “back to Starbucks,” refocusing on core coffee offerings, promising orders in under four minutes, cutting unpopular drinks, and instructing baristas to handwrite names on cups while following a strict dress code.

Under his leadership, Starbucks also underwent mass layoffs, cutting 1,100 jobs in February and implemented a four-day office return mandate starting in October.

Sales and market outlook
Despite these efforts, shares are down 7%, reducing market cap to $95.6 billion, and store traffic and profit margins remain below pre-COVID levels.

However, the company recorded its best-ever US sales week last month following the return of pumpkin spice drinks.

Meanwhile, Starbucks’ China unit, valued at about $5 billion, is attracting over 20 interested bidders as the company weighs selling a stake.