Sept 10 (Reuters) -
Starbucks' ( SBUX ) new CEO Brian Niccol said he would focus
on reinvigorating coffeehouse culture at the chain's stores in
the U.S. as he takes the helm in the midst of patchy demand for
its pricey lattes.
Starbucks ( SBUX ) named Niccol as its CEO in a surprise move last
month, replacing Laxman Narasimhan after the company's
comparable sales fell for the second straight quarter this year.
In his first week at the job, Niccol said in an open
letter he would initially focus on U.S. stores delivering drinks
and food on time and elevating in-store experience for customers
in a bid to "reestablish the brand as the community
coffeehouse."
There needs to be a clear distinction between "to-go"
and "for-here" services at the stores, the former CEO at burrito
chain Chipotle Mexican Grill ( CMG ) added.
Niccol said he would spend time in stores, meeting with
suppliers and partners in a bid to improve the company's supply
chain as well as its app and mobile ordering platform.
"In some places - especially in the U.S. - we aren't always
delivering. It can feel transactional, menus can feel
overwhelming, product is inconsistent, the wait too long or the
handoff too hectic. These moments are opportunities for us to do
better," he wrote.
Starbucks ( SBUX ) deployed its Siren System plan, which includes
equipment upgrades, across its U.S. company-operated stores in
the summer this year to increase the pace of service.
About its business in China, Niccol said Starbucks ( SBUX ) needed to
"capitalize on its strengths" in the market. Competition from
more affordable brands has hurt Starbucks ( SBUX ) in that market, with
comparable sales falling in the double digits for two straight
quarters.
In July, Narasimhan said on a post-earnings call that
Starbucks ( SBUX ) was open to looking at strategic options, including
joint ventures and partnerships for its business in China.
Niccol said Starbucks ( SBUX ) would work to "dispel misconceptions"
about the brand in the Middle East as Western brands take a hit
from a spontaneous boycott campaign linked to the Gaza war.
Starbucks ( SBUX ) has also encountered pressure from activist
investor Elliott Investment Management this year to improve its
business as the company's sales lagged.