Starbucks Faces Sales Slump as CEO Brian Niccol Plans Strategic Overhaul

SEATTLE — Starbucks, the coffee giant known for its pumpkin spice lattes and seasonal offerings, has reported a sharp decline in global same-store sales, underscoring a challenging period for the company. In preliminary fourth-quarter earnings released Tuesday after the market closed, Starbucks said same-store sales fell by 7 percent, with a 6 percent drop in North America and a 14 percent decrease in China. This report comes one week before the company’s official earnings announcement and has already impacted its stock, which dropped following the news.

For the fiscal year, Starbucks described a “pronounced traffic decline,” marking a stark contrast to its pandemic-era growth, where it benefited from loyalty programs, drive-through expansions, and a steady demand for complex iced drinks among younger customers.

CEO Brian Niccol, who joined the company from Chipotle in early September, addressed the results in a video message, stating, “It’s clear we need to fundamentally change our strategy so we can get back to growth.” Niccol’s ambitious compensation package, valued at over $100 million, was intended to incentivize his leadership at a time when Starbucks faces fierce competition and shifting consumer habits.

Amid growing competition from local coffee shops, cost-cutting by consumers, and boycott pressures, Starbucks has struggled to maintain its momentum. Despite efforts to drive sales through promotions, new products, and its mobile app, Starbucks reported that these strategies “did not improve customer behaviors” as anticipated.

In China, a key expansion market, same-store sales have dropped sharply, hindered by a competitive environment, the company noted.

Niccol emphasized that addressing operational inefficiencies would be key to Starbucks’ turnaround, highlighting the need to streamline the menu, adjust pricing, and improve mobile ordering systems to ease workflow at stores. “We will simplify our overly complex menu, fix our pricing architecture, and ensure that every customer feels Starbucks is worth it every single time they visit,” Niccol said.

Starbucks plans to share more details on its turnaround strategy during its Oct. 30 earnings call, where investors will be watching closely for solutions to restore confidence after a period of lagging sales and a stock price that has declined nearly 30 percent in the past six months.