24/7 Wall St. Insights
- The new Starbucks Corp. (NASDAQ: SBUX) CEO will spend the next 100 days at its stores and support centers.
- He will discover that the employees in many locations play loud music.
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Starbucks Corp. (NASDAQ: SBUX) is in trouble. Comparable store sales were down in North America last quarter, and global revenue was stagnant. Its stock is flat this year, while the S&P 500 is up 18%. Brian Niccol replaced CEO Laxman Narasimhan, who had not been at Starbucks long enough to find his office. Niccol doesn’t have to come to his Starbucks headquarters office; when he does, he can travel to Seattle on a private jet.
Niccol sent out a letter with his plans almost immediately after his appointment. Among the most critical elements of a turnaround was, “there’s a shared sense that we have drifted from our core. We have an opportunity to make the store experience better for our partners and, in turn, for our customers.” Niccol will spend the next 100 days at Starbucks stores and support centers. He will almost certainly use his private jet for the travel related to these plans.
Niccol will discover that in many locations the employees play music so loud that customers can barely hear baristas or other customers. This reporter has experienced that at many locations. While the practice may give the stores an upbeat ambience, drowning out conversations is likely a reason for people to get their coffee and leave.
Though many of the complaints Nicco will hear are subjective, several are almost certainly accurate. Service is too slow, particularly in the morning. Baristas are sometimes too busy to treat customers as friendly as they used to. And some stores do not open on time because workers are late.
And then there is the loud music.
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