I’m fascinated by Starbucks and their journey.
Mature brand, created a segment, once a hero to all, lost its way, now back on good footing.
Two years ago, CEO Brian Niccol took over and announced his “back to being Starbucks” program. I wrote to you about it here.
It hasn’t been quick or easy, though.
Wall Street downgraded the stock, retail analysts doubted that turnaround’s viability.
No question, Niccol heard the clock ticking.
Meanwhile, I started wondering if I’d really served you by writing so optimistically about Starbucks’ future in the first place!
How Does Starbucks Look Today?
Now, for the year ending June 30, their sales went up 4.9%. In the last quarter, global sales increased 7.9% and North American sales rose 8.1% year over year – in today’s economy. Are your numbers near that?
The lesson? Course correction for a mature brand takes time.
Changing Your Own Momentum
For decades, I’ve advised successful multi-unit restaurant company owners – more than a few with very mature brands. To keep their business on an attractive trajectory, these owners must take smart and decisive action.
So, we work together to update offerings, branding, marketing, training and education, evaluate (or change) management, reinforce culture and accountability, and focus on guests and employees – the foundational work that’s needed when changing course on decades of inertia.
Then, owners start studying their weekly sales reports and wonder, “When do I see results?” I’ve seen frustration in more than one ownership group when things don’t take off in just a few weeks.
Unlike Starbucks, though, independent restaurant companies don’t have to wait two years to see results, and owners feel so much better when they reach that accounting period with a revenue increase.
It’s Not Too Late!
One brand saw terrifying sales declines and asset degradation year after year just when the now-panicked owner expected to sell and retire. He looked at me with the fear that he had worked his whole life and he had nothing to sell.
In this extreme case, we halted the decline by focusing on the brand’s core strengths and a senior management change. Sales started increasing and the profits created a multiple of earnings that allowed the relieved owner to sell and retire exactly as he had hoped.
And the story didn’t end with him: The new buyer now steadily builds new units!
If your brand needs a little love – or just does not perform in guest count and profit the way it used to – I urge you to not blame the flat market, the war in Iran, or anything else you do not control.
Start taking action.
Find your own version of Brian Niccol’s focus on operations and guest perception and experience.
You have worked your whole life – you owe that to yourself!
