Starbucks scales back new store plans to focus on reversing sales drop: Starbucks plans to scale back store openings in 2025 as the brand focuses on redesigning its existing cafes to stem sales declines and bring back customers. In a call to discuss its earnings yesterday (Wednesday, 30 October), the brand did not specify how many stores it now plans to open or renovate as its new chief executive Brian Niccol works out details of a plan to bring “fundamental change” in response to several quarters of declining sales for the company. Chief financial officer Rachel Ruggeri said the company plans to reduce the number of our new stores and renovations in fiscal year 2025 “to accommodate a redesign, while also unlocking capital to support our broader turnaround”. The planned reduction in new openings comes less than a year after Starbucks rolled out plans to ramp up its global growth by opening 17,000 new stores by 2030. Despite the planned pullback in the coming year, Starbucks opened 722 new stores in the quarter ended 30 September 2024, a 37% jump over the previous quarter, but down from the 816 openings in the year-earlier quarter. The company has 40,199 company and licence-operated stores, with the US and China making up 61% of the global store portfolio. The company reported just under $9.1bn in revenue in the most recent quarter, a 3% drop from 2023, while US sales slipped 6%. Starbucks announced last week that it was suspending its annual financial outlook for 2025 due to the state of the company and the chief executive transition, with Niccol leaving Chipotle Mexican Grill to take over the top slot at Starbucks in September. “Our financial results were very disappointing, and it is clear we need to fundamentally change our strategy to win back customers and return to growth,” Niccol said during his first earnings call with the brand. “We have to make it easier for our customer to get a cup of coffee.” As part of Niccol’s new ‘Back to Starbucks’ plan, the company will simplify its menu and work to improve store staffing to fill orders in four minutes or less in response to customer complaints about long wait times, Niccol said. He pledged not to raise prices at its US stores in the coming year and to restore such features as condiment bars in dining rooms to improve its customers’ experience. The brand will also no longer charge extra for non-dairy milk in the US. Niccol replaced Laxman Narasimhan, who stepped down as chief executive and board director after about 16 months on the job. Niccol has said he wants to bring back a time when Starbucks was simpler and cheaper to try and win back customers and boost falling sales.

 

Busaba looks to grow guest reach with exclusive Just Eat partnership: Busaba, the TNUI-backed group of ten Thai restaurants, has signed an exclusive two-year deal with Just Eat. Busaba chief executive Winston Matthews said: “This is the start of a very exciting new delivery partnership for us and our loyal guests. The landscape is ever changing within the delivery platforms, and we felt that Just Eat provided a greater commercial opportunity to grow our guest reach and market share within London.” Amy Heather, director of strategic partnerships at Just Eat, added: “Just Eat is proud to be the exclusive home of Busaba. This partnership signifies our continued commitment to offering the best choice and value to customers across the UK.”