One year ago, Brian Niccol took the reins at Starbucks, setting the company on a journey to get back to its roots, improve customer service and ultimately turn its sales around. I sat down with Niccol here in Seattle to talk about the company's transformative year and what's ahead in year two.
Good morning, Brian. Great to see you. Thanks for having us here.
Yeah. Good morning. Good to be here.
So you are one year into this role as CEO. What in your opinion, do you hope is the most tangible difference for a customer who walks into a Starbucks today versus what they saw a year ago?
Yeah, I would say the biggest difference people hopefully are already seeing is just the idea of the whole green apron service model. You know, I think about a year ago when I rolled out the idea back to Starbucks, we said we were going to get back to being a customer service organization that could deliver great experiences in a timely manner. And I think that's exactly what we've accomplished. And you've seen it through very clear, tangible things, right from the condiment bar to things that are behind the scenes, like our smart queue technology and then probably most visible, I believe are our partners where we've been able to invest in incremental hours, which allows for bigger rosters, more partners to be deployed in the right place at the right time to ultimately create that great craft and that great connection.
And the company recently had its best sales week ever. Can you share what your data is showing you about new customer acquisitions as you lean further into hospitality?
Yeah, I mean, we're really excited about is we're seeing both non rewards customers come back in a big way as well as rewards customers. And that is to me the sign of we're doing the right things both in the store and outside of the store with communication, menu innovation and just having the brand show up the way we want it to show up again, which was all about this idea of you get exactly, you know, your personalized coffee experience and you almost, you know, when you walk into your Starbucks, you get that feeling like, you know, our partners know you. They're excited to see you. And I think, you know, that's really translating into these incremental experiences.
And you said in this most recent quarter that you've obviously been a part of turnarounds in the past. This one, by your measure, is ahead of schedule. I'm wondering when that turns into positive same store sales momentum in the U.S. in particular.
Yeah. You know, look, I think the good news is we know when we start providing the Starbucks experience that we are capable of providing, I think we're going to get really strong performance. And the good news is we've seen a lot of these green shoots kind of in small scale. And I mentioned in the last earnings call, we're ahead of schedule. Primarily, what I was talking about is the fact that we are rolling out the green apron service model now everywhere. And so, you know, we're about a month in on that. And, you know, I'm delighted to say we're seeing the impact at scale, which is really exciting to see.
Talk to us a bit about menu innovation and striking that balance between adding new buzzy items to the menu like protein coffee, but also remaining a coffee company at the core?
Yeah. Look, I think what's really important is we have to execute our core business with excellence, right? So I believe we have the best brewed coffee in the industry with our Clover Vertica machine, as well as the way that we source beans, roast the beans, and then the way in which we actually are able to produce the brewed coffee, where it literally goes from basically bean to cup all in one. You know, I think it's 25 seconds it takes on the Clover Vertica. Two things with our espresso. And people can get their lattes or their cappuccinos or their cold coffee. And now, most recently with people seem to be really excited about is matcha. So, you know, these are core elements of the business that we have to do, right? You know, we've got to have hot coffee, right? We've got to have cold coffee. Right. And we've got to have the matcha lattes. Right. And from there, I think you have a, you know, when you have strength in the core business, you're able to do some innovation around it. So protein is a great example, right. Protein cold foam will work on all those products that I just talked about as well as the protein milk. And you'll see us continue to figure out what do customers want to look for? Both in the morning occasion, the afternoon occasion, and then we can figure out how we bring it forward so that our partners are capable to execute with excellence every single time. It should never work against being able to execute the proposition of great craft, great personalization and great coffee drinks.
Where do you see consumer sentiment heading into the holiday season? As we're seeing some reports of people potentially pulling back their spending?
