Brian Niccol, the new Starbucks CEO, announced strategy changes to better fit consumer needs, including optimizing the menu contents, by simplifying the offering lists, and its form – by improving in-store digital menus. The goal is to attract Gen Z consumers. The items available are expected to be reduced by 30%.

“Over the past four months, we’ve been focused on getting Back to Starbucks and those things that have always set us apart, a welcoming coffeehouse where people gather and where we serve the finest coffee handcrafted by our skilled baristas. We believe it’s the fundamental change in strategy we needed to solve our underlying issues, restore confidence in our brand, and return the business to sustainable long-term growth. While we’re only one quarter into our turnaround, we’re moving quickly to act on the Back to Starbucks efforts we outlined on our last call, and to date, we’ve seen a positive response,” Niccol said in an earnings call. “We believe this is the fundamental change in strategy needed to solve our underlying issues, restore confidence in our brand and return the business to sustainable, long-term growth,” Niccol added.

Among the big changes lined up by the coffee giant are also plans to double the number of stores in the US. In December, the company also announced that paid parental leave would more than double for US retail store partners who work an average of 20 hours or more per week, starting in March 2025.

In January, Starbucks shared a new mission statement on its path to get ‘Back to Starbucks’: “To be the premier purveyor of the finest coffee in the world, inspiring and nurturing the human spirit — one person, one cup and one neighborhood at a time.”

Q1 Fiscal Year 2025 highlights

• The chain’s global store sales declined 4%, with a 6% decline in comparable transactions.
• The company opened 377 net new stores in Q1, ending the period with 40,576 stores: 53% company-operated and 47% licensed
• At the end of Q1, stores in the U.S. and China comprised 61% of the company’s global portfolio, with 17,049 and 7,685 stores in the U.S. and China
• Consolidated net revenues of USD 9.4 billion were flat to the prior year

“We are encouraged by our Q1 results, which demonstrated the effectiveness of our ‘Back to Starbucks’ strategy, evidenced by our top-line trend,” commented Rachel Ruggeri, chief financial officer.

Photo: Starbucks