Starbucks’ new boss is putting his stamp on the company by cutting back on discounts and promotions — forcing coffee lovers to pay full price for their drinks.
Chief Executive Brian Niccol, the former Chipotle CEO who was poached by the Seattle-based coffeehouse chain earlier this year, ordered his deputies to quietly reduce the plethora of discounts that were introduced to lure back inflation-weary customers over the course of the last year, according to The Wall Street Journal.
The move comes after Niccol made headlines for reportedly being given the option of working from his Southern California home for most of the week while overseeing the company, whose headquarters is 1,000 miles away in Seattle.
Starbucks offered a variety of deals mainly to loyalty-program members as well as buy-one-get-one-free promotions starting in May.
In June, Starbucks launched a special “pairings menu” that included a hot or iced coffee or tea with a croissant for $5.
Customers also had the choice of a breakfast sandwich with a coffee or tea for $6. Alternatively, they could have swapped in a Double Smoked Bacon or an Impossible breakfast sandwich for $7.
Last month, Starbucks rolled out an offer for extra loyalty points on Tuesdays and deals on several drink purchases on Saturdays.
But while the promotions did help bring back customers, baristas complained that Starbucks stores didn’t have adequate manpower to handle the extra workload — causing excessive wait times for people who placed an order either through the app or in person.
Starbucks was responding to similar value meals introduced by fast food giants such as McDonald’s and Taco Bell.
McDonald’s recently announced that it was extending its $5 value meal that included four items — a McChicken or McDouble sandwich, four piece chicken nuggets, fries and a drink.
But Starbucks has no plans to introduce any seasonal promotions during the fall and winter holidays. Instead, the company will focus on advertising to boost awareness of seasonal flavors such as pumpkin spice.
Prior to Niccol’s hiring as CEO, Starbucks’ previous management led by then-boss Laxman Narasimhan introduced the promotions after the company reported disappointing sales results in its quarterly earnings report.
Starbucks’ revenue fell 1% in the April-June period as customer traffic weakened in the US and China. The company is due to report earnings for the most recent quarter in early November.
In mid-August, the company announced that Narasimhan would be stepping down effective immediately and that Niccol would succeed him.
Since officially taking over the company last month, Niccol has cleaned house, according to The Journal. At least three Starbucks executives have left the company, including the heads of the North America and coffee divisions.
Starbucks’ global chief merchant and product officer, a position that was specially created by Narasimhan, also left the company. There are no plans to name a replacement for the role, according to The Journal.
The Post has sought comment from Starbucks.
