Starbucks CEO Brian Niccol Talks Earnings, Growth, Unions
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What is the main topic discussed in this episode?
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I'm here right now with Brian Nickel, fresh off his investor day here in New York City and fresh off an earnings report that actually seemed to please a lot of investors. You're five quarters right now into your tenure as CEO of Starbucks, and you put together a couple of quarters of growth, something that the company hadn't seen in quite some time.
Yeah, it was a great quarter for us. The thing that was really exciting is to see the growth was driven by transactions and also the fact that the initiatives that we put in place around operating, supporting our partners with the Green Apron service model, and then really getting back to great customer service, I think really showed up in the results this last quarter. So we're pretty excited.
So when you say transactions, are you getting more people in the store?
That's exactly right. What was great to see too is the growth in transactions came from existing customers that are in our rewards program as well as customers that are not in our rewards program. Frankly, we had been struggling to reclaim momentum with that group. In this quarter, we had both groups growing in visits and as a result, our market share increased in visitation as well.
I'm curious about the actual amount of money that they're spending. As far as the growth in tickets, that was actually a little bit underpacing what you actually saw in transactions themselves. What explains that?
That's right. So, you know, we saw about a little less than a point of ticket growth, and that's really driven by the fact that we've launched this new program around protein. So you can get a protein cold foam on any drink, and that's a modification. And then, obviously, the balance of the growth came from just more people coming to Starbucks either more often or coming back to the brand that hadn't been here in a while.
Since you took over, you've put a big emphasis on, I guess, reimagining the stores to a certain extent. This may seem like a dumb question, but why? I mean, when I look at where your revenue comes from, a lot of that is coming from the drive-thru. It's coming from takeout on the apps. It's coming from delivery. But you've put a big emphasis on the in-store experience, and I don't understand why.
Yeah, sure. Well, thanks for the question, because I do believe Starbucks is defined by the cafe and the coffee house experience. That really is where you get the human to human connection with our baristas. It's where you see the craft of Starbucks.
What insights does Starbucks CEO Brian Niccol share about their recent earnings report?
And then you also get just the soul of Starbucks. So, you know, our in-store business is still over 20 percent. The thing that I always like to remind people, too, is people access Starbucks in all these channels. So they may go via the drive-through or mobile order Monday through Friday. But Saturday, when they've got a little bit more time to dwell, they want to hang out in a great space. And so just this past month, the data I saw is 60% of our customers made at least one purchase from the counter. And that doesn't include our mobile order pickup people that come into the store to pick up their coffee or their drink or their food. So, you know, Obviously, the entire business works because we have the right access modes, right?
Mobile order pickup, delivery, drive-through, and then obviously the Yink Cafe. But I just believe the cafe experience and this idea of a community location, the third place, it's critical to people and it's critical to what makes Starbucks Starbucks.
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:00–2:54
2
What insights does Starbucks CEO Brian Niccol share about their recent earnings report?
2:54–5:55
3
How is Starbucks driving growth through customer transactions?
5:55–11:39
4
What strategies is Starbucks implementing to enhance the in-store experience?
11:39–22:39
Speakers
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