Axios interview: Starbucks' big regret and the plan to fix it
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Starbucks CEO Brian Niccol speaks before a crowd of 14,000 store managers in Las Vegas this week. Photo: Starbucks
LAS VEGAS — Starbucks CEO Brian Niccol tells Axios that one of the company's biggest missteps was pulling back on in-store seating — and now he's making it a top priority to fix it.
Why it matters: "We had this strategy that I think was just a misfire of a purpose-driven store. It's like, well, the purpose is community connection," Niccol said. "I think that's what got us off our game."
- "We've got to get the seats back," he said in an interview at the company's Leadership Experience event in Las Vegas.
The big picture: Under Niccol — who joined from Chipotle in September — Starbucks has been making a series of changes to reverse a decline in foot traffic and sales as part of what it calls the "Back to Starbucks" plan.
- After years of prioritizing digital orders and drive-thrus, Starbucks is looking to create community spaces with more seating, bringing back ceramic mugs and adding new menu items, Niccol said.
- He tells Axios that the company has been making progress, but it might take time before the results show up in earnings.
- "I hope sooner rather than later," he said.
Zoom in: Niccol called Starbucks' iconic Pumpkin Spice Latte a "fastball" and said the company has to create new "fastballs for the business."
- Some of the products being tested like a "chocolate protein cold foam," banana bread lattes and food that's baked in stores, he said.
- "It's significantly better and it also just looks delicious," he said of two croissants and a double chocolate cookie being tested. We got to innovate on those things."
What's next: Starbucks is rolling out a "Green Apron Service Model" to stores by the end of the summer, Niccol said, which it hopes will speed up the time it takes to make drinks. The company's goal: a 4-minute wait time for drinks.
- The company announced this week it will add full-time assistant managers across the U.S. to help busy stores run more smoothly.
- "We're going to have innovation to our app, our rewards program, and that will happen over the next six to nine months," Niccol told Axios.
The intrigue: Niccol's turnaround plan has the support of former Starbucks CEO Howard Schultz, who said Wednesday that he "did a cartwheel in my living room" the first time he heard about the strategy.
- "It was so brilliant. It's short, to the point and it's exactly to the tip of the spear who we should be and who we are," Schultz said from the stage. "And we are, above all else, a coffee company."
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