A Year Into Brian Niccol's Tenure, Does Starbucks' Report Card Show Enough Of A Turnaround? – CoffeeTalk

Brian Niccol, known for his turnaround campaign at Chipotle, has been the CEO of Starbucks for a year. He took over the company in September 2024 after facing a low point in its business, with customers complaining about long wait times, a buggy app, and understaffed stores struggling to consistently deliver quality products. In July, the company reported six straight quarters of declining sales from Q2 in 2024 through Q3 of 2025.

Niccol detailed a turnaround plan in a September 2024 open letter, detailing a “Back to Starbucks” comeback campaign covering everything from how baristas should dress to revamping the mobile ordering system. A year later, a Starbucks spokesperson said that the “Back to Starbucks” plan is making things better for both customers and employees. However, Wall Street is not convinced of the company’s turnaround efforts.

Despite progress, Starbucks is not out of the financial woods yet. Shares surged 25% on the day of Niccol’s appointment, but the stock has fallen by nearly 9% over the past 12 months since he started the job. Investors want more evidence that the company’s turnaround efforts are improving, and analysts are still keeping a close eye on the coffee giant’s bottom line.

Asit Sharma, a senior investment analyst at The Motley Fool, said that traffic and repeat visits from loyal customers have to get rolling again. Despite the stock’s underperformance, analysts, including Andrew Charles at TD Cowen, remain optimistic. Starbucks is working to bring back its cozy café vibe and streamline ordering.

Starbucks has made several changes to improve its customer experience, including offering free brewed coffee refills and reducing wait times. To enhance service, the company introduced tweaks to the ordering system, reducing the maximum number of items customers can order online, introducing a new algorithm for mobile orders, and encouraging baristas to get drinks in customers’ hands in four minutes or less. Starbucks also brought back the self-serve condiment bar, refurbished some cafés with comfy chairs and ceramic dishware, and announced plans to convert some pick-up-only stores to embody the vibes of a cozy community hub.

Data from Placer.ai shows that the rate of visits to the chain has improved year over year, suggesting that the “Back to Starbucks” campaign is beginning to drive a turnaround. Starbucks’ biggest difference has been the move away from transactional pickup coffee stores and the return to ceramic cups, which rejuvenate Starbucks’ iconic ‘third place’ feeling.

Under Niccol’s tenure, the company has changed its expectations of employees. A nationwide strike against the coffee giant has expanded, forcing more than 60 stores to temporarily close. Some of Starbucks’ corporate policy changes led to strikes by the Starbucks Workers United union.

Niccol implemented a new dress code earlier this year, requiring in-store staff to wear a solid-color black shirt and either black, blue denim, or khaki pants. Some employees protested the change by staging walkouts in May. The CEO also implemented a strict return-to-office mandate for corporate workers, which corporate employees previously said they were worried the shift signaled that the company’s beloved people-first culture was eroding.

An August survey of 737 current Starbucks baristas found 91% of respondents reported issues with understaffing at their stores. As of July, Starbucks had a total of more than 40,000 stores worldwide, with 17,230 in the US. This summer, Starbucks said it would invest $500 million in additional labor hours and operations and hire at least one dedicated, full-time assistant store manager in each of its company-operated stores.

Starbucks’ international efforts in China are showing promise, with sales in the country totaling $790 million in the latest quarter, or about 8% of its global quarterly sales. However, the second-largest market faces challenges from competitors like Luckin Coffee and Cotti Coffee, which offer discounted drinks that appeal to price-sensitive consumers. Chinese customers value an efficient digital experience, often opting for mobile-ordering options and to-go kiosks.

Starbucks CEO Brian Niccol visited China for market research and told investors that there were “several near-term changes” Starbucks could make to strengthen the business while continuing to explore strategic partnerships. The company launched a summertime discount promotion to woo back budget-conscious customers and modified its menu, releasing a sugar-free coffee line and more iced teas and non-coffee beverages to compete with local bubble tea competitors.

The company is looking to sell part of its stake in its China business to local operators, considering proposals from more than 20 potential partners. Jason Yu, the managing director of China-based CTR Market Research, said the partnership would inject capital into the business and bring resources like real estate and local supply chain partners into the mix, which could help Starbucks grow.

In the most recent quarter, comparable store sales in Chinese stores increased 2% compared to the year before, driven by a 6% increase in transactions. Analysts give Starbucks’ leader a solid B, with experts agreeing that they need to fine-tune their strategy and create that coffeehouse feel again.

However, turning around a company the size of Starbucks is no easy feat. Charles, the TD Cowen analyst, said Niccol needs more time to get customers fully back to Starbucks. He believes that the operational foundation needed to be poured so when customers come back, the experience justifies returning more frequently.

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