When Starbucks CEO Brian Niccol took the helm of the global coffee chain in September, inflation was up and store traffic and sales were down.
On Wednesday, the 50-year-old executive detailed his plan to turn Starbucks around. The company’s new “green apron service model” — focusing on hospitality and efficiency — will differentiate the company from competitors and boost its sales, Niccol told CNBC’s “Squawk on the Street.”
“Starbucks, unfortunately, has been mismanaged for a couple of years,” said Niccol. “And we’re fortunate that we have such a strong, resilient brand that I think we’re going to be able to bounce back with the right programs and the right strategy.”
Last week, Starbucks began training baristas on the green apron model, which includes reducing the number of hours per store with minimum staffing, adding a “smart queue” to help customers get their orders in four minutes or less, and encouraging more personalized interactions between guests and employees, and new menu items, Niccol said.
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Starbucks’ renewed focus on customer service is part of Niccol’s “Back to Starbucks” strategy, which he implemented upon becoming the chain’s CEO. The company’s quarterly earnings on Tuesday were lackluster, with same-store sales falling for a sixth consecutive quarter, dating back to previous CEO Laxman Narasimhan’s tenure.
Getting back to the “operational foundation” of the business will put them ahead of schedule for a comeback, said Niccol.
Some Wall Street analysts are confident in Niccol’s strategy. “The focus for Starbucks’ third fiscal quarter was less on the results (which were below Street expectations) and more on proof points on the pace of the potential recovery ahead,” Sharon Zackfia, a William Blair analyst wrote in a note to clients on Wednesday.
Another analyst, Andrew Charles of T.D. Cowen, also wrote in a Wednesday research note that he’s confident Starbucks’ sales will grow because of the company’s “more aggressive innovation agenda.”
Niccol has a reputation for corporate turnarounds. He was CEO of Chipotle for six years before joining Starbucks, and under his leadership, Chipotle swiftly bounced back from food safety scares, improved its annual sales and its stock climbed 773% — a record for the company.
As CEO of Taco Bell from 2015 to 2018, Niccol introduced initiatives including mobile ordering across the U.S. and the brand’s “Live Mas” slogan.
“We’re definitely ahead of schedule on fixing the operational foundation,” Niccol said on Wednesday. “[Our strategy] ultimately will result in a better Starbucks.”
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