Starbucks' new Chairman and CEO Brian Niccol wants customers to get their orders hand-delivered by a barista in four minutes or less, a goal that will be central as he tries to reinvigorate the company's sagging sales.
“We have to make it easier for our customers to get a cup of coffee,” Niccol said in his first conference call with investors since joining Starbucks in September.
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Niccol said about half of the company's transactions are now completed in four minutes or less. He wants to focus on the bottlenecks that delay the other half, from inadequate staffing during rush periods to slow ovens cooking food to Starbucks' overly complex menu.
“When you start to use that metric, you quickly discover where our stores have a real problem,” Niccol said. “We’re going to be maniacal about getting after it.”
Niccol said Starbucks will start with faster service at the counter, with mobile orders and drive-thru orders to follow.
Niccol said Starbucks needs to pare down its food and drink offerings so baristas can focus on making fewer things consistently.
First on the chopping block: Starbucks' Oleato olive-oil infused beverages, which will be discontinued from most locations beginning in early November. They will still be available at some locations in Italy, Japan and China.
The decision breaks a link to longtime Starbucks leader Howard Schultz, who came up with the idea for Oleato after visiting an olive oil producer in Sicily. Schultz called the beverage a “transformational idea” when he introduced it in Italy in early 2023. It went on sale in the U.S. earlier this year.
Niccol also said the process for customizing drinks should be simpler. Right now, the company offers a myriad of ways to customize every drink, which confuses customers and sometimes forces baristas to make a drink in a less than ideal way.
On Wednesday, Starbucks made a first attempt to streamline the customization process by saying it will stop charging extra for using non-dairy beverages in its drinks. Starting Nov. 7, when Starbucks’ holiday menu is due to be introduced, customers will be allowed to choose soy milk, oat milk, almond milk or other varieties at no additional cost.
Starbucks said substituting a plant-based milk for dairy milk is the second most-requested customization at its store after adding a shot of espresso. But the charges can add up. At a Starbucks in Michigan on Wednesday, it cost 70 cents to switch to almond milk in a medium Pumpkin Spice Latte.
Starbucks said it will reduce the number of new stores and renovations planned over the next year to give it time to consider a store redesign.
Niccol said it's crucial to get Starbucks back to the community coffeehouse it used to be. Stores will be bringing back ceramic mugs for in-store customers and Sharpie pens so baristas can write a message on a customer's order. Stores will also get more comfortable seating and separate areas for mobile order pickups.
“I want you to feel like you’ve walked into a special space,” Niccol said.
Niccol's comments came as Starbucks reported a disappointing end to its 2024 fiscal year. Starbucks said its revenue fell 3% to $9.1 billion in the July-September period as customer traffic slowed in the U.S. and China. For the full year, Starbucks said its revenue rose less than 1% to $36 billion.
The Seattle-based coffee giant released the bad financial news last week and said that it would suspend financial guidance for its 2025 fiscal year to give Niccol time to assess the business.