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Tag: Brian Niccol

  • Starbucks workers kick off 65-store US strike on company’s busy Red Cup Day

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    More than 1,000 unionized Starbucks workers went on strike at 65 U.S. stores Thursday to protest a lack of progress in labor negotiations with the company.

    The strike was intended to disrupt Starbucks’ Red Cup Day, which is typically one of the company’s busiest days of the year. Since 2018, Starbucks has given out free, reusable cups on that day to customers who buy a holiday drink. Starbucks Workers United, the union organizing baristas, said Thursday morning that the strike had already closed some stores and was expected to force more to close later in the day.

    Starbucks Workers United said stores in 45 cities would be impacted, including New York, Philadelphia, Minneapolis, San Diego, St. Louis, Dallas, Columbus, Ohio, and Starbucks’ home city of Seattle. There is no date set for the strike to end, and more stores are prepared to join if Starbucks doesn’t reach a contract agreement with the union, organizers said.

    Starbucks emphasized that the vast majority of its U.S. stores would be open and operating as usual Thursday. The coffee giant has 10,000 company-owned stores in the U.S., as well as 7,000 licensed locations in places like grocery stores and airports.

    As of noon Thursday on the East Coast, Starbucks said it was on track to meet or exceed its sales expectations for the day at its company-owned stores.

    “The day is off to an incredible start,” the company said in a statement.

    Around 550 company-owned U.S. Starbucks stores are currently unionized. More have voted to unionize, but Starbucks closed 59 unionized stores in September as part of a larger reorganization campaign.

    Here’s what’s behind the strike.

    A stalled contract agreement

    Striking workers say they’re protesting because Starbucks has yet to reach a contract agreement with the union. Starbucks workers first voted to unionize at a store in Buffalo in 2021. In December 2023, Starbucks vowed to finalize an agreement by the end of 2024. But in August of last year, the company ousted Laxman Narasimhan, the CEO who made that promise. The union said progress has stalled under Brian Niccol, the company’s current chairman and CEO. The two sides haven’t been at the bargaining table since April.

    Workers want higher pay, better hours

    Workers say they’re seeking better hours and improved staffing in stores, where they say long customer wait times are routine. They also want higher pay, pointing out that executives like Niccol are making millions and the company spent $81 million in June on a conference in Las Vegas for 14,000 store managers and regional leaders.

    Dochi Spoltore, a barista from Pittsburgh, said in a union conference call Thursday that it’s hard for workers to be assigned more than 19 hours per week, which leaves them short of the 20 hours they would need to be eligible for Starbucks’ benefits. Spoltore said she makes $16 per hour.

    “I want Starbucks to succeed. My livelihood depends on it,” Spoltore said. “We’re proud of our work, but we’re tired of being treated like we’re disposable.”

    The union also wants the company to resolve hundreds of unfair labor practice charges filed by workers, who say the company has fired baristas in retaliation for unionizing and has failed to bargain over changes in policy that workers must enforce, like its decision earlier this year to limit restroom use to paying customers.

    Starbucks stands by its wages and benefits

    Starbucks says it offers the best wage and benefit package in retail, worth an average of $30 per hour. Among the company’s benefits are up to 18 weeks of paid family leave and 100% tuition coverage for a four-year college degree. In a letter to employees last week, Starbucks’ Chief Partner Officer Sara Kelly said the union walked away from the bargaining table in the spring.

    Kelly said some of the union’s proposals would significantly alter Starbucks’ operations, such as giving workers the ability to shut down mobile ordering if a store has more than five orders in the queue.

    Kelly said Starbucks remained ready to talk and “believes we can move quickly to a reasonable deal.” Kelly also said surveys showed that most employees like working for the company, and its barista turnover rates are half the industry average.

    Limited locations with high visibility

    Unionized workers have gone on strike at Starbucks before. In 2022 and 2023, workers walked off the job on Red Cup Day. Last year, a five-day strike ahead of Christmas closed 59 U.S. stores. Each time, Starbucks said the disruption to its operations was minimal. Starbucks Workers United said the new strike is open-ended and could spread to many more unionized locations.

    The number of non-union Starbucks locations dwarfs the number of unionized ones. But Todd Vachon, a union expert at the Rutgers School of Management and Labor Relations, said any strike could be highly visible and educate the public on baristas’ concerns.

    Unlike manufacturers, Vachon said, retail industries depend on the connection between their employees and their customers. That makes shaming a potentially powerful weapon in the union’s arsenal, he said.

    Improving sales

    Starbucks’ same-store sales, or sales at locations open at least a year, rose 1% in the July-September period. It was the first time in nearly two years that the company had posted an increase. In his first year at the company, Niccol set new hospitality standards, redesigned stores to be cozier and more welcoming, and adjusted staffing levels to better handle peak hours.

    Starbucks also is trying to prioritize in-store orders over mobile ones. Last week, the company’s holiday drink rollout in the U.S. was so successful that it almost immediately sold out of its glass Bearista cup. Starbucks said demand for the cup exceeded its expectations, but it wouldn’t say if the Bearista will return before the holidays are over.

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  • How 1 LinkedIn Post Shows the Ruthless Reach of the Starbucks Layoffs

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    What’s colder than a mocha frappuccino? Losing your job while on maternity leave.

    That’s the reality former Starbucks recruiter Leslee Hemenway faces after being laid off by the coffee chain, according to her LinkedIn post on Monday. Hemenway worked at Starbucks for seven years and was one of their retail management interns during college, her LinkedIn profile reads. She was one of the 900 non-retail employees laid off from Starbucks last week.

    “Being laid off while on maternity leave feels like a sick joke, but it’s the reality I’m presently facing,” Hemenway’s post said.

    Starbucks CEO Brian Niccol said the layoffs were a “difficult decision” to tighten the company’s costs, he announced online. Employees were instructed to work from home on the day laid-off employees were notified. Affected employees will receive “generous severance and support packages including benefits extensions,” according to Niccol. Starbucks did not return a request for comment by the time of publication to offer a more detailed explanation.

    “I know these decisions impact our partners and their families, and we did not make them lightly,” Niccol said in a company announcement. “I believe these steps are necessary to build a better, stronger, and more resilient Starbucks that deepens its impact on the world and creates more opportunities for our partners, suppliers, and the communities we serve.”

    In addition to corporate layoffs, Starbucks is also closing hundreds of its U.S. stores, including its flagship Reserve Roastery near its Seattle headquarters. The company said it was closing locations where they don’t see “a path to financial performance,” and they’re unable “to create the physical environment our customers and partners expect.” Baristas working at the closing stores are being transferred to other locations, when possible, Niccol said. In cases where transfers are not possible, these workers will be given a severance and are encouraged to “come back” when new stores and roles open.

    As for Hemenway, she’s going to use the severance package she received to take time to bond with her newborn.

    “After the birth of my daughter this summer, I’m going to savor the time I have with her and not actively pursue a new role for now,” Hemenway said on LinkedIn. “However, if you know of something that might be a particularly good fit in recruiting or talent management, please feel free to send it my way.”

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    Kayla Webster

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  • Which Starbucks in Atlanta are closing and why?

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    The Starbucks at 100 Peachtree Street (above) is also across the street from a Georgia State University building. Students could often be seen working at the indoor and outdoor tables. Photo by Donnell Suggs/The Atlanta Voice

    In Atlanta, it seems like there’s a Starbucks on every corner, but on National Coffee Day, that expectation is shifting. The multinational coffeehouse chain recently announced that it would be shuttering the doors of hundreds of stores. 

    In a statement on Sept. 28, Brian Niccol, the Starbucks chairman and chief executive officer, said they’d been reviewing their North American coffeehouse portfolio to identify and close underperforming stores. The restructuring is part of a “Back to Starbucks” plan focused on returning to its roots through a simplified menu, an elevated store experience, and a redesign.  

    “During the review, we identified coffeehouses where we’re unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance, and these locations will be closed,” Niccol said.  

    Coffeehouses scheduled to close were notified last week. In Atlanta, those closures include the location on the lower level of the Equitable Building at 100 Peachtree Street, 21 14th Street, and 1870 Piedmont Avenue. The closure of over 400 stores will impact “non-retail partner roles,” resulting in 900 corporate layoffs. In the statement, Niccol shared that they are “working hard to offer transfers to nearby locations where possible” and will offer severance packages for partners they can’t immediately place.

    The decision comes after Starbucks reported a decline in sales for six consecutive quarters as of July 2025.

    Born and raised in Brooklyn, New York, Donnell began his career covering sports and news in Atlanta nearly two decades ago. Since then he has written for Atlanta Business Chronicle, The Southern Cross…

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    Donnell Suggs

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  • Starbucks announces significant store closures and layoffs

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    Starbucks is taking “significant action” to turn around its struggling business, closing a large number of cafés and announcing a second round of layoffs at its headquarters as part of CEO Brian Niccol’s efforts to resuscitate the troubled chain.Niccol announced Thursday that Starbucks will close hundreds of stores this month, or about 1% of its locations. The company had 18,734 North American locations at the end of June, and the company said it will end September with 18,300 stores.The company expects its restructuring efforts will cost $1 billion. Shares of Starbucks were flat in premarket trading.In a letter to employees, Niccol said the company underwent a review of its footprint and the locations that will close were ones “unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance.”Starbucks often closes locations for a variety of reasons, including underperformance. But Niccol said this larger-scale effort is more substantial.”This is a more significant action that we understand will impact partners and customers. Our coffeehouses are centers of the community, and closing any location is difficult,” he said.Despite the hundreds of closures, which will take place before the end of the company’s fiscal year next week, Starbucks said it will return to growth mode, and it also plans to remodel more than 1,000 locations. The new look for Starbucks features cozier chairs, more power outlets and warmer colors.In addition to the store closures, Starbucks announced an additional 900 corporate layoffs, on top of the roughly 1,000 layoffs in February. Affected employees will be notified on Friday and will receive “generous severance and support packages.” Also, “many” open positions will be closed, he announced.”I know these decisions impact our partners and their families, and we did not make them lightly,” Niccol wrote. “I believe these steps are necessary to build a better, stronger and more resilient Starbucks that deepens its impact on the world and creates more opportunities for our partners, suppliers and the communities we serve.”One year onNiccol joined Starbucks about a year ago, hoping to revive the storied coffee chain. However, the financial results haven’t come to fruition, with the stock down about 12% and sales haven’t turned around.He’s pared back the menu by about 30%, while also introducing new items to keep the brand on trend, like protein toppings and coconut water. Food is also getting a revamp, with new croissants and baked goods being rolled out.In addition to remodels, smaller touches have been integrated, like bringing back self-serve milk and sugar stations as well as doodles on coffee cups. The company also tweaked its name to “Starbucks Coffee Company” to reinforce its coffee roots.However, his changes have butted heads with some baristas, including uniform changes that sparked a lawsuit. And some new drinks are causing stress for baristas because they are overcomplicated to make during peak times.

    Starbucks is taking “significant action” to turn around its struggling business, closing a large number of cafés and announcing a second round of layoffs at its headquarters as part of CEO Brian Niccol’s efforts to resuscitate the troubled chain.

    Niccol announced Thursday that Starbucks will close hundreds of stores this month, or about 1% of its locations. The company had 18,734 North American locations at the end of June, and the company said it will end September with 18,300 stores.

    The company expects its restructuring efforts will cost $1 billion. Shares of Starbucks were flat in premarket trading.

    In a letter to employees, Niccol said the company underwent a review of its footprint and the locations that will close were ones “unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance.”

    Starbucks often closes locations for a variety of reasons, including underperformance. But Niccol said this larger-scale effort is more substantial.

    “This is a more significant action that we understand will impact partners and customers. Our coffeehouses are centers of the community, and closing any location is difficult,” he said.

    Despite the hundreds of closures, which will take place before the end of the company’s fiscal year next week, Starbucks said it will return to growth mode, and it also plans to remodel more than 1,000 locations. The new look for Starbucks features cozier chairs, more power outlets and warmer colors.

    In addition to the store closures, Starbucks announced an additional 900 corporate layoffs, on top of the roughly 1,000 layoffs in February. Affected employees will be notified on Friday and will receive “generous severance and support packages.” Also, “many” open positions will be closed, he announced.

    “I know these decisions impact our partners and their families, and we did not make them lightly,” Niccol wrote. “I believe these steps are necessary to build a better, stronger and more resilient Starbucks that deepens its impact on the world and creates more opportunities for our partners, suppliers and the communities we serve.”

    One year on

    Niccol joined Starbucks about a year ago, hoping to revive the storied coffee chain. However, the financial results haven’t come to fruition, with the stock down about 12% and sales haven’t turned around.

    He’s pared back the menu by about 30%, while also introducing new items to keep the brand on trend, like protein toppings and coconut water. Food is also getting a revamp, with new croissants and baked goods being rolled out.

    In addition to remodels, smaller touches have been integrated, like bringing back self-serve milk and sugar stations as well as doodles on coffee cups. The company also tweaked its name to “Starbucks Coffee Company” to reinforce its coffee roots.

    However, his changes have butted heads with some baristas, including uniform changes that sparked a lawsuit. And some new drinks are causing stress for baristas because they are overcomplicated to make during peak times.

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  • Starbucks Pumpkin Spice Latte, Fall Menu, Drive Record Sales | Entrepreneur

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    It’s pumpkin spice season, and Starbucks is raking in the profits. The coffee giant launched its fall seasonal offerings last week, including the famous Pumpkin Spice Latte (PSL), and the company has already seen an increase in sales, according to Starbucks CEO Brian Niccol.

    In an internal memo on Monday seen by Bloomberg, Niccol said that the fall products, including pumpkin-flavored offerings like the latte, pumpkin cream cold brew, and iced pumpkin cream chai, helped Starbucks “deliver a record-breaking sales week” at its U.S. company-operated stores last week.

    Related: Starbucks Is Hiring In-Store Human Workers After Replacing People With Machines — and Finding It Didn’t Work

    Starbucks first introduced the PSL in 2003, marking over two decades of the popular drink. There have been hundreds of millions of units of the beverage sold since launch.

    Starbucks had 41,097 stores as of July, with 53% operated by the company and 47% licensed.

    The news of rising sales arrives as Starbucks is in the midst of a turnaround, working to reverse consecutive quarters of declining sales. Niccol is in charge of the effort; under his leadership, Starbucks has adopted a “Back to Starbucks” plan designed to bring customers back to stores.

    Changes under the plan include cutting 30% of the Starbucks menu, making coffee more quickly, and personalizing customers’ orders by writing names down in Sharpie on their cups.

    Starbucks is also adding new offerings, like protein cold foam with 15 grams of protein and no added sugar, in the coming year. It is additionally reducing sugar in drinks by adding coconut water-based drinks, like coconut-water matcha and cold brew.

    Related: ‘We’re Not Effective’: Starbucks CEO Tells Corporate Employees to ‘Own Whether or Not This Place Grows’

    In July, Starbucks reported its sixth consecutive quarter of declining store sales. According to the coffee chain’s earnings report for the quarter ending June 29, store sales dropped by 2% worldwide and in North America. However, net revenue rose 4% to $9.5 billion in the quarter, a 3% jump.

    In the earnings report, Niccol stated that the company is “ahead of schedule” to “unleash a wave of innovation” next year.

    Niccol also announced a mandate in July that corporate employees come back to the office four days a week, up from three, starting at the beginning of the company’s fiscal quarter in October.

    It’s pumpkin spice season, and Starbucks is raking in the profits. The coffee giant launched its fall seasonal offerings last week, including the famous Pumpkin Spice Latte (PSL), and the company has already seen an increase in sales, according to Starbucks CEO Brian Niccol.

    In an internal memo on Monday seen by Bloomberg, Niccol said that the fall products, including pumpkin-flavored offerings like the latte, pumpkin cream cold brew, and iced pumpkin cream chai, helped Starbucks “deliver a record-breaking sales week” at its U.S. company-operated stores last week.

    Related: Starbucks Is Hiring In-Store Human Workers After Replacing People With Machines — and Finding It Didn’t Work

    The rest of this article is locked.

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    Sherin Shibu

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  • CEO pay rose nearly 10% in 2024 as stock prices and profits soared

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    NEW YORK (AP) — The typical compensation package for chief executives who run companies in the S&P 500 jumped nearly 10% in 2024 as the stock market enjoyed another banner year and corporate profits rose sharply.

    Many companies have heeded calls from shareholders to tie CEO compensation more closely to performance. As a result, a large proportion of pay packages consist of stock awards, which the CEO often can’t cash in for years, if at all, unless the company meets certain targets, typically a higher stock price or market value or improved operating profits.

    The Associated Press’ CEO compensation survey, which uses data analyzed for The AP by Equilar, included pay data for 344 executives at S&P 500 companies who have served at least two full consecutive fiscal years at their companies, which filed proxy statements between Jan. 1 and April 30.

    Here are the key takeaways from the survey:

    A good year at the top

    The median pay package for CEOs rose to $17.1 million, up 9.7%. Meanwhile, the median employee at companies in the survey earned $85,419, reflecting a 1.7% increase year over year.

    CEOs had to navigate sticky inflation and relatively high interest rates last year, as well as declining consumer confidence. But the economy also provided some tail winds: Consumers kept spending despite their misgivings about the economy; inflation did subside somewhat; the Fed lowered interest rates; and the job market stayed strong.

    The stock market’s main benchmark, the S&P 500, rose more than 23% last year. Profits for companies in the index rose more than 9%.

    “2024 was expected to be a strong year, so the (nearly) 10% increases are commensurate with the timing of the pay decisions,” said Dan Laddin, a partner at Compensation Advisory Partners.

    Sarah Anderson, who directs the Global Economy Project at the progressive Institute for Policy Studies, said there have been some recent “long-overdue” increases in worker pay, especially for those at the bottom of the wage scale. But she said too many workers in the world’s richest countries still struggle to pay their bills.

    The top earners

    Rick Smith, the founder and CEO of Axon Enterprises, topped the survey with a pay package valued at $164.5 million. Axon, which makes Taser stun guns and body cameras, saw revenue grow more than 30% for three straight years and posted record annual net income of $377 million in 2024. Axon’s shares more than doubled last year after rising more than 50% in 2023.

    General Electric Co. CEO Lawrence Culp Jr. signs a $52 billion deal by Emirates to purchase Boeing aircraft with GE engines, at the Dubai Air Show, in Dubai, United Arab Emirates, Monday, Nov. 13, 2023. (AP Photo/Lujain Jo)

    Almost all of Smith’s pay package consists of stock awards, which he can only receive if the company meets targets tied to its stock price and operations for the period from 2024 to 2030. Companies are required to assign a value to the stock awards when they are granted.

    Other top earners in the survey include Lawrence Culp, CEO of what is now GE Aerospace ($87.4 million), Tim Cook at Apple ($74.6 million), David Gitlin at Carrier Global ($65.6 million) and Ted Sarandos at Netflix ($61.9 million). The bulk of those pay packages consisted of stock or options awards.

    The median stock award rose almost 15% last year compared to a 4% increase in base salaries, according to Equilar.

    Tim Cook attends the WSJ. Magazine Innovators Awards at the Museum of Modern Art on Tuesday, Oct. 29, 2024, in New York. (Photo by Evan Agostini/Invision/AP, File)

    Tim Cook attends the WSJ. Magazine Innovators Awards at the Museum of Modern Art on Tuesday, Oct. 29, 2024, in New York. (Photo by Evan Agostini/Invision/AP, File)

    “For CEOs, target long-term incentives consistently increase more each year than salaries or bonuses,” said Melissa Burek, also a partner at Compensation Advisory Partners. “Given the significant role that long-term incentives play in executive pay, this trend makes sense.”

    Jackie Cook at Morningstar Sustainalytics said the benefit of tying CEO pay to performance is “that share-based pay appears to provide a clear market signal that most shareholders care about.” But she notes that the greater use of share-based pay has led to a “phenomenal rise” in CEO compensation “tracking recent years’ market performance,” which has “widened the pay gap within workplaces.”

    Some well-known billionaire CEOs are low in the AP survey. Warren Buffett’s compensation was valued at $405,000, about five times what a worker at Berkshire Hathaway makes. According to Tesla’s proxy, Elon Musk received no compensation for 2024, but in 2018 he was awarded a multiyear package that has been valued at $56 billion and is the subject of a court battle.

    Other notable CEOs didn’t meet the criteria for inclusion the survey. Starbucks’ Brian Niccol received a pay package valued at $95.8 million, but he only took over as CEO on Sept. 9. Nvidia’s Jensen Huang saw his compensation grow to $49.9 million, but the company filed its proxy after April 30.

    The pay gap

    At half the companies in AP’s annual pay survey, it would take the worker at the middle of the company’s pay scale 192 years to make what the CEO did in one. Companies have been required to disclose this so-called pay ratio since 2018.

    The pay ratio tends to be highest at companies in industries where wages are typically low. For instance, at cruise line company Carnival Corp., its CEO earned nearly 1,300 times the median pay of $16,900 for its workers. McDonald’s CEO makes about 1,000 times what a worker making the company’s median pay does. Both companies have operations that span numerous countries.

    Overall, wages and benefits netted by private-sector workers in the U.S. rose 3.6% through 2024, according to the Labor Department. The average worker in the U.S. makes $65,460 a year. That figure rises to $92,000 when benefits such as health care and other insurance are included.

    “With CEO pay continuing to climb, we still have an enormous problem with excessive pay gaps,” Anderson said. “These huge disparities are not only unfair to lower-level workers who are making significant contributions to company value – they also undercut enterprise effectiveness by lowering employee morale and boosting turnover rates.”

    Some gains for female CEOs

    This photo provided by Otis Elevator Co. shows CEO Judy Marks. (via AP)

    This photo provided by Otis Elevator Co. shows CEO Judy Marks. (via AP)

    For the 27 women who made the AP survey — the highest number dating back to 2014 — median pay rose 10.7% to $20 million. That compares to a 9.7% increase to $16.8 million for their male counterparts.

    The highest earner among female CEOs was Judith Marks of Otis Worldwide, with a pay package valued at $42.1 million. The company, known for its elevators and escalators, has had operating profit above $2 billion for four straight years. About $35 million of Marks’ compensations was in the form of stock awards.

    Other top earners among female CEOs were Jane Fraser of Citigroup ($31.1 million), Lisa Su of Advanced Micro Devices ($31 million), Mary Barra at General Motors ($29.5 million) and Laura Alber at Williams-Sonoma ($27.7 million).

    FILEw - Jane Fraser, CEO, Citigroup, speaks during a Senate Banking, Housing, and Urban Affairs Committee oversight hearing to examine Wall Street firms on Capitol Hill, Wednesday, Dec. 6, 2023 in Washington. (AP Photo/Alex Brandon, File)

    FILEw – Jane Fraser, CEO, Citigroup, speaks during a Senate Banking, Housing, and Urban Affairs Committee oversight hearing to examine Wall Street firms on Capitol Hill, Wednesday, Dec. 6, 2023 in Washington. (AP Photo/Alex Brandon, File)

    Lisa Su, CEO of Advanced Micro Devices, arrives for a dinner at the Elysee Palace, during an event on the sidelines of the Artificial Intelligence Action Summit in Paris, Monday, Feb. 10, 2025. (AP Photo/Thomas Padilla, File)

    Lisa Su, CEO of Advanced Micro Devices, arrives for a dinner at the Elysee Palace, during an event on the sidelines of the Artificial Intelligence Action Summit in Paris, Monday, Feb. 10, 2025. (AP Photo/Thomas Padilla, File)

    Christy Glass, a professor of sociology at Utah State University who studies equity, inclusion and leadership, said while there may be a few more women on the top paid CEO list, overall equity trends are stagnating, particularly as companies cut back on DEI programs.

    “There are maybe a couple more names on the list, but we’re really not moving the needle significantly,” she said.

    FILE- Mary Barra, chair and CEO of General Motors, talks to David Rubenstein during an interview hosted by the Economic Club of Washington, Wednesday, Dec. 13, 2023, in Washington. (AP Photo/Stephanie Scarbrough, File)

    FILE- Mary Barra, chair and CEO of General Motors, talks to David Rubenstein during an interview hosted by the Economic Club of Washington, Wednesday, Dec. 13, 2023, in Washington. (AP Photo/Stephanie Scarbrough, File)

    Prioritizing security

    Equilar found that a larger number of companies are offering security perquisites as part of executive compensation packages, possibly in reaction to the December shooting of UnitedHealthCare CEO Brian Thompson.

    Equilar said an analysis of 208 companies in the S&P 500 that filed proxy statements by April 2 showed that the median spending on security rose to $94,276 last year from $69,180 in 2023.

    Among the companies that increased their security perks were Centene, which provides health care services to Medicare and Medicaid, and the chipmaker Intel.

    __

    Reporters Matt Ott and Chris Rugaber in Washington contributed.

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  • Your misspelled name may be coming to a cup of Starbucks near you – WTOP News

    Your misspelled name may be coming to a cup of Starbucks near you – WTOP News

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    The new Starbucks chairman and CEO Brian Niccol hopes a shot of nostalgia and a sharpie will help the coffee giant break out of their sales slump.

    A barista sets down a completed drink in a single-use cup at a Starbucks retail location, Wednesday, June 28, 2023, in Seattle.
    (AP Photo/Lindsey Wasson)

    AP Photo/Lindsey Wasson

    FILE – In a Wednesday, March 18, 2015 file photo, Holly Ainslie, a barista at a Starbucks store in Seattle writes on a cup for an iced drink.
    (AP Photo/Ted S. Warren, File)

    AP Photo/Ted S. Warren, File

    FILE - Brian Niccol, named the chairman and chief executive officer of Starbucks on Aug. 13, 2024, is shown during an interview on June 9, 2015, in New York. (AP Photo/Mark Lennihan, File)
    FILE – Brian Niccol, named the chairman and chief executive officer of Starbucks on Aug. 13, 2024, is shown during an interview on June 9, 2015, in New York.
    (AP Photo/Mark Lennihan, File)

    AP Photo/Mark Lennihan, File

    WTOP’s Jimmy Alexander spoke with customers near the Starbucks in Dupont Circle.
    (WTOP/Jimmy Alexander)

    WTOP/Jimmy Alexander

    The new Starbucks chairman and CEO Brian Niccol hopes a shot of nostalgia and a sharpie will help the coffee giant break out of their sales slump.

    Starbucks reported a disappointing end to its 2024 fiscal year. Starbucks said its revenue fell 3% to $9.1 billion in the July-September period as customer traffic slowed in the U.S. and China. For the full year, Starbucks said its revenue rose less than 1% to $36 billion.

    “We have to make it easier for our customers to get a cup of coffee,” Niccol said in his first conference call with investors since joining Starbucks in September.

    Niccol wants customers to get their orders hand-delivered by a barista in four minutes or less. He said about half the company’s transactions are now completed in four minutes or less. He wants to focus on the bottlenecks that delay the other half, from inadequate staffing during rush periods to slow ovens cooking food to Starbucks’ overly complex menu.

    Another goal for Niccol is for Starbucks to once again become the community coffeehouse it used to be. That is why ceramic mugs will once again be used by in-store customers, and baristas will have a sharpie pen in their hand so they can write a message on the customer’s order.

    “I love this. I got so many different names,” said D.C. resident Bryn. “I got Gwen all the time,”

    Bryn spoke to WTOP near the Starbucks in Dupont Circle. “I’ve gotten ‘Grin,’ ‘Gwen,’ ‘Brian’ just a few times. Or they’ll just do a nice guess. They’ll try to get as close, like a few Aarons.”

    Bryn’s friend joined the conversation and stated the many names he had found on his Starbucks cup.

    “My name is Miles, so I have gotten, obviously, the MI and the my, I’ve gotten Mikes. I’ve gotten Mike and every once in a while, I did have a barista pull out the classic high school crank of inches or kilometers,” said Miles.

    Even though Bryn rarely got a cup from Starbucks with her actual name on it, she is pleased that the sharpie is coming back. “You know what? I would love the names back. I think that’s a great choice.”

    Bryn did admit that she enjoys the stickers that are on the cups. Not only because your order is on the side along with your name spelled correctly.

    “I like the Dupont (Starbucks) when they put stickers on them that say, like random, like motivational phrases. I caught that on my birthday. They were like, you are loved, and others love you. And I’m like, love it, yeah.”

    When it comes to the stickers or sharpie, Miles told WTOP that “I don’t mind the wrong order. Give the baristas the freedom.”

    The Associated Press contributed to this report.

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    © 2024 WTOP. All Rights Reserved. This website is not intended for users located within the European Economic Area.

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    Ciara Wells

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  • Starbucks North America CEO Michael Conway Quits After Just 6 Months In The Position

    Starbucks North America CEO Michael Conway Quits After Just 6 Months In The Position

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    Starbucks North America CEO Michael Conway Quits After Just 6 Months In The Position

    In a surprising move, Michael Conway, Starbucks (NASDAQ:SBUX) North America CEO, has resigned after only six months in the role.

    What Happened: Conway, who took on the position in April, informed the company of his decision last week, as per a Securities and Exchange Commission filing. He will remain with the company until November 30 to assist with the leadership transition, concluding his 11-year tenure at Starbucks, Business Insider reported on Tuesday.

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    Before his North American CEO role, Conway served as group president of international and channel development and president of Starbucks Canada. His appointment was part of a reorganization effort by former CEO Laxman Narasimhan, Bloomberg noted in March.

    Rather than appointing a new CEO for North America, Starbucks announced that Sara Trilling, the company’s North American president, will oversee retail operations across the region. Trilling has been with Starbucks for 22 years and previously managed 3,500 stores as senior vice president of its north division.

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    The company aims to enhance decision-making efficiency by streamlining its leadership structure, The Wall Street Journal reported. Conway’s departure follows other significant leadership changes, including the recent appointment of Brian Niccol, former CEO of Chipotle, as Starbucks’ new top executive.

    Operational challenges have affected Starbucks’ North American stores, with complex drink orders, rising prices, and varying foot traffic impacting staff and profitability. Niccol plans to revamp operations and focus on customer experience, he stated last week.

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    Why It Matters: This leadership change comes amid a series of strategic shifts at Starbucks. In March, the company announced a new geographic leadership structure to support global functions, appointing Conway as North America CEO to spearhead this initiative.

    In August, the appointment of Brian Niccol as the new CEO boosted Starbucks’ valuation by over $15 billion in just one day. Niccol, known for his successful tenure at Chipotle, aims to steer Starbucks through its current challenges and enhance customer experience.

    On his second day as CEO, Niccol outlined his vision to reconnect Starbucks with its community coffeehouse roots. He emphasized the need for comfortable seating and a clear distinction between “to-go” and “for-here” services to improve the in-store experience.

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    This article Starbucks North America CEO Michael Conway Quits After Just 6 Months In The Position originally appeared on Benzinga.com

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  • Chipotle Mexican Grill’s restaurant traffic grows as the chain proves its pricing power

    Chipotle Mexican Grill’s restaurant traffic grows as the chain proves its pricing power

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    Chipotle Mexican Grill on Tuesday reported quarterly earnings and revenue that topped analysts’ expectations, fueled by better than expected same-store sales growth.

    Like McDonald’s, Chipotle said traffic to its restaurants grew during the first quarter despite higher menu items. Chipotle’s menu prices are up roughly 10% from a year earlier. CEO Brian Niccol said the chain has demonstrated that it has pricing power.

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    “We don’t want to be in front of the inflationary environment, but we also don’t want to fall behind,” he said on the company’s conference call.

    Pedestrians wearing protective masks walk in front of a Chipotle restaurant in San Francisco, California, April 19, 2021.

    David Paul Morris | Bloomberg | Getty Images

    For now, Chipotle is pausing price increases, Niccol said on CNBC’s “Closing Bell.”

    Shares of the company rose more than 7% in extended trading.

    Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

    • Earnings per share: $10.50 vs. $8.92 expected
    • Revenue: $2.37 billion vs. $2.34 billion expected

    Chipotle reported first-quarter net income of $291.6 million, or $10.50 per share, up from $158.3 million, or $5.59 per share, a year earlier. The company’s menu price hikes and lower avocado prices helped improve profit margins compared with the year-ago period.

    Revenue climbed 17.2%, to $2.37 billion, from $2 billion during the year-earlier period. Same-store sales rose 10.9%, topping StreetAccount estimates of 8.6%. 

    Niccol said that higher-income consumers are returning to restaurants more frequently. Even lower-income diners are visiting more often than they were in the prior six months, although their traffic remains down from a year ago. Overall, traffic rose roughly 4% in the quarter, reversing last quarter’s decline.

    In February, executives said January’s same-store sales grew by double digits. A year earlier, the company saw sluggish sales as the omicron Covid outbreak put pressure on staffing and caused some temporary store closures.

    Chipotle’s chicken al pastor is on track to be the chain’s most popular limited-time protein option ever, Niccol said on the company’s conference call. The company launched it in mid-March.

    Digital orders accounted for nearly 40% of sales during the quarter. Chipotle customers have been ordering their burritos and tacos more in person compared with the year-ago period.

    Executives also outlined changes coming to restaurants to improve speed of service and accuracy. The chain has been testing new grills that cook faster and more consistently. It has also been experimenting with how to staff its two make lines to keep up with demand from both in-person diners and digital orders.

    The company opened 41 new locations during the quarter, 34 of which included its drive-thru lanes reserved for digital order pickup.

    Looking to the rest of the year, Chipotle is anticipating same-store sales growth in the mid-to-high single digits. It’s expecting the same range for its second-quarter same-store sales growth, roughly in line with StreetAccount estimates of 5.8%.

    The company reiterated its plans to open between 255 to 285 new restaurants during 2023.

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  • Fast food reigns supreme as inflation weighs on pricier restaurants

    Fast food reigns supreme as inflation weighs on pricier restaurants

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    A girl waiting in line to pick up an order at a McDonald’s restaurant.

    Oleksii Chumachenko | SOPA Images | Lightrocket | Getty Images

    Fast-food chains are looking like the big winners in the fourth quarter — and beyond — as fast-casual and casual-dining restaurants struggle to attract customers.

    Many publicly traded restaurant companies haven’t reported their latest quarterly results yet, but for those that have, a pattern is emerging. Inflation-weary customers pulled back their restaurant spending during the holiday season, just as they spent less than expected at retailers. Savvy fast-food chains appealed to those consumers with value menus and enticing promotions, drawing in customers across the income spectrum.

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    Generally, the fast-food sector fares better than the rest of the industry during times of economic uncertainty and downturns.

    Take McDonald’s, for example. The fast-food giant said U.S. same-store sales climbed 10.3%, helped in part by low-income consumers returning more frequently than they had for the prior two quarters. Executives also credited the success of its Adult Happy Meal promotion and the annual return of the McRib for its strong sales growth. Its U.S. traffic increased for the second consecutive quarter, bucking the industry trend.

    Likewise, rival Yum Brands reported solid U.S. demand. Taco Bell’s domestic same-store sales climbed 11%, boosted by increased breakfast orders, the return of Mexican Pizza and its value meals. Pizza Hut’s U.S. same-store sales grew 4%, while KFC’s ticked up 1% as it faced tough year-ago comparisons.

    More fast-food earnings are on deck in the coming weeks. Burger King owner Restaurant Brands International is slated to announce its fourth-quarter results on Tuesday, while Domino’s Pizza will post its earnings Feb. 23.

    ‘We just didn’t see that pop’

    In contrast to McDonald’s and Yum’s strong results, Chipotle Mexican Grill on Tuesday reported quarterly earnings and revenue that fell short of Wall Street’s estimates for the first time in more than five years. CEO Brian Niccol maintained that the burrito chain’s price hikes haven’t led to “meaningful resistance” from customers.

    Instead, Chipotle executives presented a laundry list of reasons why its performance disappointed: bad weather, the underperforming launch of Garlic Guajillo Steak, tough comparisons to the previous year’s brisket launch and seasonality.

    Customers order from a Chipotle restaurant at the King of Prussia Mall in King of Prussia, Pennsylvania.

    Mark Makela | Reuters

    “As we got around the holidays, we just didn’t see that pop, that momentum, that we normally see … frankly, we started the quarter soft, and we ended the quarter soft,” Chipotle Chief Financial Officer Jack Hartung said on the company’s conference call, comparing the decline in December to weaker retail sales at that time.

    Chipotle said that traffic turned positive in January. However, the chain is facing easy comparisons to a year earlier, when Omicron outbreaks forced Chipotle and other chains to shutter early or temporarily close locations. And Bank of America analyst Sara Senatore noted in a research note on Wednesday that January’s unseasonably warm weather has been supporting demand for the broader industry.

    Rival fast-casual chains haven’t reported their fourth-quarter earnings yet. Shake Shack is set to share its results on Feb. 16. However, in early January, it announced preliminary same-store sales growth that fell short of Wall Street’s estimates. Sweetgreen is slated to report its results on Feb. 23, while Portillo’s is scheduled for March 2.

    Casual-dining concerns

    Fast-casual restaurants’ struggles are an even worse sign for the casual-dining segment.

    For more than a decade, casual-dining restaurants have struggled to attract customers as Chipotle, Sweetgreen and Shake Shack have stolen their customers. So the likes of Red Lobster and Applebee’s have turned to offering deep discounts or spending big bucks on advertising.

    Soaring inflation has compounded the issue, particularly for restaurant companies like Brinker International, which is trying to turn around Chili’s Grill and Bar.

    A customer walks towards the entrance of a Brinker International Inc. Chili’s Grill & Bar restaurant in San Antonio, Texas.

    Callaghan O’Hare | Bloomberg | Getty Images

    At the start of the month, Brinker reported that Chili’s traffic fell 7.6% for the quarter ended Dec. 28. Brinker CEO Kevin Hochman, the former head of KFC’s U.S. business, told analysts on the company’s conference call that the decline was expected as it tries to shed less profitable transactions. Chili’s has hiked its prices and cut down on coupons as part of the strategy.

    More full-service restaurants are expected to report their results later this month. Outback Steakhouse owner Bloomin’ Brands is slated to make its announcement on Feb. 16.

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