Starbucks' new boss is giving the company the thumbs up by cutting discounts and promotions and forcing coffee lovers to pay full price for their drinks.
CEO Brian Nicol, a former Chipotle chief executive who was poached from the Seattle-based coffee house chain earlier this year, said the company was brought in last year to lure back customers fed up with inflation. He ordered his subordinates to quietly reduce the large amount of discounts. , According to the Wall Street Journal.
The move comes after Mr. Nicol made headlines after it was reported that he was given the option to work most of the week from his home in Southern California while overseeing the company, which is headquartered 1,000 miles away in Seattle.
Starting in May, Starbucks offered a variety of sales and buy-one-get-one-free promotions, primarily to loyalty program members.
In June, Starbucks launched a special “pairing menu” that includes hot or iced coffee or tea and a croissant for $5.
Customers also had the option of a breakfast sandwich with coffee or tea for $6. Alternatively, you could swap in double-smoked bacon or an Impossible breakfast sandwich for $7.
Last month, Starbucks offered extra loyalty points on Tuesdays and a sale on several drinks on Saturdays.
But while the promotions helped bring customers back, Starbucks stores don't have enough staff to handle the extra workload, resulting in excessive wait times for those who order through the app or in person. The barista complained that it was causing
Starbucks was responding to similar value meals introduced by fast food giants such as McDonald's and Taco Bell.
McDonald's recently announced an extension to its $5 meal deal, which includes a McChicken or McDouble sandwich, four pieces of chicken nuggets, fries, and a drink.
However, Starbucks has no plans to introduce seasonal promotions during the fall and winter holidays. Instead, the company will focus on advertising to increase awareness of seasonal flavors such as pumpkin spice.
The promotion was introduced by Starbucks' previous management team, led by then-boss Laxman Narasimhan, after the company reported disappointing sales results in its quarterly earnings report before Nicol took over as CEO.
Starbucks' sales fell 1% in the April-June period as customer traffic slowed in the U.S. and China. The company is scheduled to release its latest quarterly earnings in early November.
In mid-August, the company announced that Mr. Narasimhan would be stepping down with immediate effect and that Mr. Nicol would take his place.
Since officially taking over the company last month, Nichol has been cleaning house, according to the Journal. At least three executives have left Starbucks, including the heads of North America and coffee.
Starbucks' global chief merchant and product officer, a position specifically created by Mr. Narasimhan, also left the company. There are no plans to name a replacement for the role, according to the Journal.
The Post has reached out to Starbucks for comment.
