Starbucks’ new boss is putting his stamp on the company by cutting discounts and promotions – forcing coffee lovers to pay full price for their drinks.
Chief Executive Brian Niccol, the former CEO of Chipotle who was poached by the Seattle-based coffeehouse chain earlier this year, quietly ordered his representatives to wind down the plethora of discounts they introduced to lure them back. Consumers tired of inflation During the last year, According to the Wall Street Journal.
This step comes after Nicole made headlines He was reportedly given the option to work from his home in Southern California for most of the week while overseeing the company, which is headquartered 1,000 miles away in Seattle.
Starbucks offered a variety of deals primarily to loyalty-program members, as well as a buy-one-get-one-free promotion starting in May.
In June, Starbucks Launched a special “Pair Menu” Which included hot or iced coffee or tea with a croissant for $5.
Customers also had the option of a breakfast sandwich with coffee or tea for $6. Alternatively, they could swap for the Double Smoked Bacon or the Impossible Breakfast Sandwich for $7.
Last month, Starbucks began offering deals on extra loyalty points on Tuesdays and multiple beverage purchases on Saturdays.
But while the promotion helped bring customers back, baristas complained that Starbucks stores didn’t get the same sufficient manpower to handle stretch assignment – causing excessive wait times For those who ordered through the app or in person.
Starbucks was responding to similarly priced meals offered by fast food giants such as McDonald’s and Taco Bell.
McDonald’s recently announced that it is expanding its $5 value meal which includes four items – a McChicken or McDouble sandwich, four pieces of chicken nuggets, fries and a drink.
But Starbucks has no plans to launch any seasonal promotions during the fall and winter holidays. Instead, the company will focus on advertising to increase awareness of seasonal flavors like pumpkin spice.
Prior to Niccol’s appointment as CEO, Starbucks’ previous management, led by then-boss Laxman Narasimhan, had initiated promotions after the company reported disappointing sales results in its quarterly earnings report.
Starbucks revenue fell 1% in the April-June period due to weak customer traffic in the US and China. The company is scheduled to report earnings for its most recent quarter in early November.
In mid-August, the company announced that Narasimhan would be leaving his position with immediate effect and would be replaced by Nicole.
According to The Journal, since officially taking over the company last month, Nicole has cleaned house. At least three Starbucks executives have left the company, including the heads of its North America and coffee divisions.
Starbucks’ global chief merchandiser and product officer, a position created specifically by Narasimhan, also left the company. According to The Journal, there are no plans to name a replacement for the role.
The post sought comment from Starbucks.
