Starbucks Introduces Comprehensive Revitalization Plan to Overcome Poor Performance

 

   Starbucks is implementing a new strategy to overcome its recent performance struggles. This change aims to alleviate customer burdens and boost sales. Notably, the elimination of additional charges for plant-based milk is one of the customer-friendly measures included. In this article, we will explore Starbucks' new policies, the background behind them, and the expected outcomes.

 

 Announcement of Starbucks' Revitalization Plan

   On the 30th (local time), Brian Niccol, the CEO of Starbucks, announced that a new revenue-boosting initiative would be implemented starting from the 7th of next month at company-operated stores in the United States and Canada. This move is designed to respond to customer needs and primarily aims to overcome poor performance.

 

   Key Details

• Elimination of Additional Charges for Plant-Based Milk: Starting next month, customers will no longer incur extra charges for choosing soy milk or other plant-based milks when ordering popular beverages like lattes and cappuccinos. The current additional charge of up to 80 cents will be removed, resulting in an effective price reduction of over 10% for customers.
• Enhancement of In-Store Convenience: The company plans to add comfortable seating, ceramic mugs, and condiment bars to improve customer convenience.
• Faster Beverage Service: Starbucks aims to serve beverages within four minutes of ordering and will simplify its complex menu.

 

 Background of Poor Performance

   This revitalization plan is primarily driven by Starbucks' recent poor performance. In the fourth quarter of the 2023 fiscal year (July to September), same-store sales in the U.S. fell by 6% year-on-year. This decline has negatively impacted the company's growth trajectory, and it has postponed its revenue outlook for the coming year.

 

   CEO's Remarks

   CEO Niccol stated, "The performance has been very disappointing," emphasizing the need for a fundamental strategic shift to regain customer trust and growth momentum. This reflects Starbucks' commitment to listening to customer demands.

 

 Customer Reactions

   The decision to eliminate the additional charge for plant-based milk has received a positive response from customers. Previously, claims of discrimination against customers with milk allergies regarding these extra charges led to legal action. This new policy can be seen as a reflection of those customer voices.

 

   Expected Effects

• Customer Attraction: The removal of additional charges is expected to attract more customers.
• Improvement in Brand Image: By adopting customer-friendly policies, Starbucks anticipates an enhancement in its brand image.

 

Future Plans

   This policy will initially be implemented at company-operated stores in the U.S. and Canada, with the application in other countries to be determined based on local market conditions. Starbucks plans to continue pursuing various customer-focused policies in the future.

 

Starbucks' new revitalization plan aims to alleviate customer burdens and boost sales, particularly through the elimination of additional charges for plant-based milk, which is seen as a customer-friendly decision. It remains to be seen how these efforts will help Starbucks overcome its performance struggles. We look forward to seeing whether these changes will positively impact Starbucks' growth.