Although achieving a 2024 net revenue of $36.18 billion is no easy feat, the Seattle-based coffee giant Starbucks has been facing a decline in their global store sales over the past few years. As competition rises and consumer preferences have evolved, the company is looking for ways to revitalize its brand, and a new CEO Brian Niccol, has stepped in.
A Brief History
Founded by Gordon Bowker, Zev Siegl, and Jerry Baldwin in 1971, these men invested $1,350 each and borrowed $5,000 from the bank, opening their first store in Pike Place Market on March 30, 1971. Though originally focused on selling high-quality coffee beans, Starbucks evolved into a retail coffeehouse chain under Howard Schultz, who joined in the 1980s as the director of operations and marketing.
Although Schultz temporarily left Starbucks to start his own coffeehouse chain, he returned as CEO to purchase Starbucks. Rebranding it with a modern vibe, he opened over 3,000 stores, including its first international location in Japan. Over the years, Schultz has stepped down and returned to leadership multiple times, shaping Starbucks into what it is today. He now serves as the company’s chairman emeritus, acting as an advisor based on his former experience as chairman and CEO.
Shifts in Leadership
After Schultz stepped down, Laxman Narasimhan served as CEO starting in April 2023, bringing an innovative approach to the company’s operations. However, his tenure was fairly short-lived, ending in August 2024, due to various factors, including pressures from activist investors.
In response, Schultz recruited Brian Niccol, the former CEO of Chipotle and Starbucks chairman, to take over as CEO on Sept. 9, 2024. Niccol is known for successfully redeeming Chipotle after its E. coli outbreak scare.
“Back to Starbucks”
Niccol released in a statement at the end of Starbucks’ last fiscal quarter, “Our fourth quarter [fiscal] performance makes it clear that we need to fundamentally change our strategy so we can get back to growth, and that’s exactly what we are doing with our ‘Back to Starbucks’ plan.”
On Monday the 21st, stores reinstated the condiment bar, which was removed during the COVID-19 pandemic. This was a feature that customers especially missed, and baristas encouraged their reinstallment to help reduce preparation times.
Additionally, Starbucks is bringing back free refills for hot and iced brewed coffee and tea for dine-in customers. They are also reintroducing the iconic ceramic coffee mugs and glasses in an effort to support their action for sustainability and commit to the in-store experience.
However, one of the more controversial changes is the company’s reversal of its open bathroom policy. Previously, anyone could use Starbucks restrooms, but customers must now make a purchase to do so.
With “Back to Starbucks” now in effect, the company seems excited to pursue stronger customer loyalty and operations. Although the challenges of competition and labor remain, perhaps the end of 2025 will reveal whether Niccol’s leadership has successfully revitalized Starbucks.
