Starbucks has reported a smaller-than-expected drop in comparable sales, offering an early sign that its turnaround strategy may be gaining traction. The world’s largest coffee chain saw global same-store sales fall 4% in its fiscal first quarter ended 29 December, beating analyst forecasts of a 4.6% decline, according to LSEG data.
The company, which recently announced that customers using its cafes across North America must make a purchase, is working to revive demand under new chief executive Brian Niccol. Niccol, who joined in September, has said Starbucks needs to “fundamentally change” its strategy. Changes include a simpler menu, ceramic cups, refills, condiment bars, and a push to reduce wait times to under four minutes.
In North America, comparable sales fell 4%, better than the expected 4.7% drop. In China, sales declined 6%, a marked improvement from the 14% fall in the previous quarter. Shares rose 4% in after-hours trading on Wall Street and have gained nearly 30% since Niccol’s appointment was announced in August.
“While we’re only one quarter into our turnaround, we’re moving quickly to act on the ‘Back to Starbucks’ efforts and we’ve seen a positive response,” Niccol said. “We believe this is the fundamental change in strategy needed to solve our underlying issues, restore confidence in our brand and return the business to sustainable, long-term growth.”
