On Tuesday, Starbucks shares dropped down by 4.2% in trading. The CEO highlights the drawbacks of the company’s strategies and its struggle to stay relevant with customers.
“People love Starbucks,” Starbucks CEO Brian Niccol said. “But I’ve heard from some customers that we’ve drifted from our core, that we’ve made it harder to be a customer than it should be, and that we’ve stopped communicating with them.
He continued, “As a result, some are visiting less often, and I think today’s results tell that same story.”
Moreover, Starbucks said that the turnaround “will make time” as its new chief executive was settled just one month before. Niccol expressed that the company had lost its identity as a coffee chain and he would make it a community coffee house again.
The company revealed that the new CEO attempts to recharge customers’ demand with promotions and discounts on services and products. He suggests simplifying the “overly complex” menu to refine its prices and change the company’s way of doing overall business.
Starbucks claimed that the company’s sales fell 7%, total revenue declined 3% to $9.1 billion, and the adjusted earnings distributed per share is 80 cents. The Wall Street Journal reported this month that CEO Niccol focuses more on discounting policies for Starbucks’ strong growth.
In late 2022, company founder Howard Schultz described Starbucks as an “affordable luxury” but the increasing cost of living changed the habit of spending money. He added that Starbucks needs to “maniacal focus on the customer experience.”
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