Starbucks scales back discounts as new CEO seeks turnaround
Starbucks CEO Brian Niccol is pumping breaks on discounts as it tries to turn around the struggling coffee giant.
The company has reduced discounts it offers during the past year since Niccol, tapped to become CEO in August, replacing Laxman Narasimhan, took over, executives told the Wall Street Journal.
Niccol, formerly the Chipotle CEO, was chosen to replace Narasimhan after a slumping stock price and sales drop prompted pressure from activist investors and former CEO Howard Schultz, who posted on social media in May that the company needed a strategic overhaul.
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Starbucks is one of several restaurants and fast-food chains that doled out discounts to win back cost-conscious consumers amid inflation. Moving forward, Niccol is deploying a different strategy to win back customers.
During the holiday season, for instance, the company doesn't plan to run broad offers though it will promote seasonal drinks, the company said earlier this month during a strategy update for store leaders, according to the WSJ.
Niccol announced last month that he plans to first fix the company's U.S. business and will begin the early steps, laying the groundwork in his first 100 days on the job, which includes making stores more comfortable for customers, improving efficacy within stores and improving workforce morale.
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One key focus area will be making sure drinks and food are made "on time" and that stores will be more inviting. His aim is to create more comfortable seating, so people will linger longer, and create a better distinction between "to-go" and "for-here" services.
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Another key area will focus on career opportunities for partners and ensuring they have a "clear path to growth." He will also concentrate on ensuring baristas have the needed tools and necessary time to make the drinks.