Starbucks hoped mobile orders and the drive-thru would save its business. New CEO Brian Niccol says that was a mistake
Brian Niccol was parachuted in to turn around Starbucks in September last year and isn’t keeping the problems he’s inherited to himself.
The former Chipotle CEO has made it clear he wants the coffee chain to go back to its roots: a comfortable coffeehouse where customers feel appreciated—even if it’s just with a Sharpie-drawn smiley face on their takeaway cups.
When he joined, the Starbucks boss said stores were congested with customers waiting for mobile orders and members of the public making the most of an open-bathroom policy.
That’s changed under Niccol—a move which has divided opinion—with the CEO adding that bets on drive-thru customers and mobile orders haven’t paid off.
“We spent a lot of time trying to figure out how to cost-save our way to a very efficient drink and not enough time on what is the experience that Starbucks provides,” Niccol said in an interview with the Wall Street Journal.
“Right now, when you mobile order, you’ll sometimes get a message that says your drink will be ready in three minutes. You physically can’t get there in three minutes,” Niccol explained. “We’re mismatching when the customer wants it and when we’re making it, and the number one request is, ‘Let me pick what time I can come and pick up my beverage.’”
The problem Niccol identifies isn’t a new one. Former CEO Howard Schultz described the app as the brand’s Achilles’ heel, saying it “overflowed to the point where it disproportionately created an environment in our stores where the mobile app became the primary vehicle, as well as the primary vehicle for dissatisfaction, because people couldn’t get their drink on time; people were confused whether that was their drink.”
Speaking to the Acquired podcast last year, Schultz described the chaos around the barista counter as a “mosh pit,” adding: “That’s not Starbucks.”
Sales data from last year laid the issue bare. On its Q2 2024 call, the company said between one in seven or eight customers abandoned their order because of how busy their particular Starbucks café is.
By the end of the year, the company reported global comparable store sales were down by 2%; in the fourth quarter, they fell by a significant 7%.
“Obviously, I wasn’t here, but when I look at the situation, I think we lost focus on that moment of connection,” Niccol added.
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