In his first quarterly call with Wall Street analysts as CEO of Starbucks on Wednesday evening, Brian Niccol offered both investors and employees something they’ve long wanted: clarity and decisiveness.
The past few years have been bumpy for the coffee shop chain. The company has had four CEOs since 2022 and has bounced between different strategies. The result is often chaotic store operations, three consecutive quarters of declining same-store sales and a brand adrift. Niccol, who turned around Chipotle Mexican Grill before joining Starbucks, was hired outside the burrito chain in August to halt Starbucks’ decline. Wall Street was so relieved by the news that the coffee company’s shares rose 24% the day his new role was announced.
While Niccol had already teased some elements of his strategy and leadership style in recent days, he outlined his “Back to Starbucks” plan in detail during the earnings call. And most importantly, he impressed as a decisive CEO who knows how to communicate a way forward.
“It is clear that we need to fundamentally change our strategy to win back customers and return to growth,” Niccol told Wall Street analysts.
The CEO announced a number of additional initiatives aimed at returning Starbucks to the basics of its business, reversing steps that had slowed operations and frustrated customers. These include bringing back self-serve milk and sugar stations to the thousands of US cafes starting in 2025, so customers can choose how much to put in their drink, rather than asking a barista. Starbucks will no longer charge customers extra for non-dairy milk alternatives. And Niccol mentioned cutting back on the complex menu and introducing “common sense” to mobile ordering.
Niccol showed that kind of quick action and decisiveness at Chipotle in 2018, when he was brought in to help it recover from a devastating food safety crisis exacerbated by top management. Wall Street analysts expressed relief at seeing these qualities again on display during the Starbucks call.
The new CEOs approached offered “a clear and detailed vision for the future, and ambitious, like the Starbucks brand at its best,” Morgan Stanley wrote in a note, according to Investing.com. Niccol’s performance also earned him some compliments from Stifel, whose analysts wrote that Niccol “delivered his message with a level of clarity and precision that is typically the mark of a talented leader.”
The focus on returning to a “welcoming coffeehouse” and clarity on that vision is exactly what Starbucks employees and customers need after a long period of turmoil. For years, Starbucks promoted its stores as a “third place,” besides the home or office, where customers could go to relax. But a few years ago, the company decided to focus on turning stores into mobile ordering hubs. This not only created chaotic pickup traffic at peak times, but also made Starbucks products feel more like a commodity than an experience, and reduced the size of some stores.
