'Not Coming for Coffee' Starbucks... Unveils 'Secret Weapon' Amid Poor Performance

Starting Next Month, Additional Charges for Plant-Based Milk Will Be Removed Mainly at US and Canada Direct Stores
Significant Impact from Overall Poor Performance

Starbucks stock photo.

The world's largest coffee chain, Starbucks, has introduced a comprehensive reform plan, including the elimination of additional charges for plant-based milk, to overcome its poor performance.

According to U.S. media outlets such as CNBC and the Financial Times (FT) on the 30th of last month (local time), Brian Niccol, Starbucks CEO, announced in his first earnings report since taking office, "Starting November 7, we will implement new revenue-boosting measures primarily at company-operated stores in the U.S. and Canada."

According to the plan, Starbucks will no longer charge extra fees for adding plant-based milk such as soy milk when ordering drinks like caf? latte or cappuccino. Currently, the additional charge can be as high as 80 cents (about 1,100 won), so removing this fee will reduce prices by more than 10%. Although plant-based milk is already provided without extra charge for drinks like Americano, this service will be expanded.

This policy will be first implemented at company-operated stores in the U.S. and Canada, with other countries' stores deciding on application based on market conditions.

A Starbucks store in downtown Seoul.
[Photo by Yonhap News]

Starbucks introduced this reform plan due to its ongoing "poor performance." Rexmian Narasimhan, the former CEO who led Starbucks since March last year, resigned after 17 months, taking responsibility for the poor performance. Niccol, who successfully managed the fast-food chain Chipotle Mexican Grill, succeeded him as CEO.

In Starbucks' fiscal fourth quarter (July to September) results announced that day, same-store sales in the U.S. declined by 6% compared to the same period last year, continuing the sluggish trend. CEO Niccol said, "The results are very disappointing," emphasizing, "It is clear that fundamental strategic changes are necessary to regain customers and growth momentum."

Meanwhile, despite facing poor performance in the global market, Starbucks continues steady growth domestically. In the first quarter of this year, sales reached 734.6 billion won, up 7.6% year-on-year, marking the highest quarterly sales ever. Additionally, in the second quarter, sales reached 759.7 billion won, up 7.5% year-on-year, achieving the highest quarterly sales on record.