Starbucks to ‘simplify’ menu to regain customers

The new CEO of Starbucks, Brian Niccol, has vowed to streamline the coffee chain’s “overly complex menu” in an effort to regain customers and reverse declining sales. He acknowledged the need for “fundamental change” within the company, including a review of pricing strategies.

Recent data showed that customers have reduced their spending at Starbucks due to the rising cost of living, especially in China. Niccol also noted that the chain’s stores are facing issues such as staffing shortages and long wait times.

Starbucks declined to specify if the menu changes and price adjustments would impact the UK market. Between July and September, the company saw a 7% drop in global sales, with a steeper 14% decline in China amid economic challenges.

Rachel Ruggeri, Starbucks’ chief financial officer, admitted that despite increased investments, the company struggled to curb the decline in customer traffic. To address the slowdown, Niccol committed to “getting back to Starbucks,” promising to simplify the menu, adjust pricing, and ensure that each visit is worthwhile for customers. He also emphasized the need to refine the mobile ordering system to prevent it from disrupting the café experience.

Randeep Somel, a fund manager at L&G, suggested that a more affordable and streamlined menu could help reduce wait times during busy periods.

Niccol, who previously led Chipotle, was brought on board to turn around the business. However, his decision to commute nearly 1,000 miles from Newport Beach, California, to the company’s headquarters in Seattle via corporate jet faced criticism, as it seemed at odds with Starbucks’ public environmental commitments.

The company, which is set to release its full results next week, saw its shares fall by 4% after suspending financial forecasts for the next year due to the “current state of the business.”

The previous CEO, Laxman Narasimhan, who was removed after 18 months in the role, had aimed to revitalize the menu with new offerings like boba drinks and a pesto egg sandwich while seeking to speed up service. He left the company in August.