By Lucy Hooker and João da Silva, Business reporters
The new boss of Starbucks has promised to simplify its “overly complex menu” as the coffee chain attempts to win back customers and boost falling sales.
Brian Niccol said the company needed to “fundamentally change” and said it would review its pricing. Figures revealed that Starbucks’ customers have cut back on spending as the rising cost of living squeezed budgets, particularly in China.
But Mr Niccol also admitted that there were issues in its stores such as not enough staff and customer bottlenecks.
The company said global sales tumbled by 7% between July and September. The downturn was more dramatic in China, where sales fell 14% for the same period, as the economy there falters.
“Despite our heightened investments, we were unable to change the trajectory of our traffic decline,” said Rachel Ruggeri, Starbucks’ chief financial officer.
To improve its slowing sales, Mr Nichol pledged to “get back to Starbucks”.
“We will simplify our overly complex menu, fix our pricing architecture, and ensure that every customer feels Starbucks is worth it every single time they visit,” he said.
He added: “We need to refine mobile order and pay so it doesn’t overwhelm the café experience.”
Randeep Somel, fund manager at financial services firm L&G, said a cheaper and less complicated menu could help speed up service.
“At peak times, the queues are just too large so if you simplify the menu it might help customer throughput,” he told BBC Radio 4’s Today Programme.
Mr Niccol, who previously headed the Mexican food chain Chipotle, was brought into Starbucks to help turn the business around.
But he faced criticism over his plan to commute almost 1,000 miles (1,600km) from his family home in Newport Beach, California, to the firm’s headquarters in Seattle on a corporate jet.
Critics saw it as in contradiction with the company’s public stance on green issues.
Starbucks is due to release its full results next week. It shares dropped 4% on Tuesday as it suspended its financial forecasts for the next year due to “current state of the business”.
