JO LING KENT:
00:00:27
After years of losing steam, Starbucks may be grinding its way to a comeback. Have a good day.
JO LING KENT:
00:00:33
Nearly 14 months after CEO Brian Niccol was brought in from Chipotle to turn America's largest coffee chain around, Starbucks says compared to last year, same store sales in the US went up in September and October for the first time in nearly two years. And the average Starbucks purchase increased 1% in the last quarter. That means our customers are coming in more often and they love what they're experiencing.
JO LING KENT:
00:00:59
We sat down with Brian Niccol at Seattle headquarters for an exclusive broadcast interview as consumers grapple with coffee prices that across the board have spiked 19% in just a year. Can you promise no price hikes next year? We've got to just watch what happens in the world. But pricing would be one of those things that we do as a last resort, and we do it very surgically. You wouldn't see us taking broad scale pricing. That's not on the table.
JO LING KENT:
00:01:24
Starbucks says new offerings like protein-infused drinks, beverages in old school mugs, and redesigned stores like this one in Seattle with more comfortable couches are helping. You've changed the furniture, but do you really think that changing the furniture will continue to bring people back in? Without a doubt. I mean, it's much more than just the furniture. It's the whole vibe. The place basically says, "you're welcome to stay here. We want you here."
JO LING KENT:
00:01:49
You've also got major competition. McDonald's, Dunkin', Luckin from China, all lower priced alternatives. What's your plan to compete? And do you introduce a value menu at some point? Yeah, no-- look, first of all, at Starbucks, we love competing. We have a huge point of difference, and that is the experience you get in our stores. You're going to want to linger in a Starbucks. You can get the customization at Starbucks that you can't get anywhere else. The experience sets us apart from everybody else.
JO LING KENT:
00:02:19
Starbucks closed 107 stores across the country and laid off nearly 900 corporate workers in September, while recently introducing new AI technology to help baristas with drink recipes and inventory. Is it just a matter of time before we have AI baristas? You know, I don't think so. Our business is based on the human touch, and we always have to have that barista-customer connection. I think there's tremendous opportunity with voice where you could literally just say, "you know what, I want my protein latte. Find me the closest Starbucks. I'll be there in 15 minutes." But when you get to the store, you're still going to be greeted by a person. So that's not going to change? That's not changing.
JO LING KENT:
00:03:01
But as Starbucks pushes forward, some baristas are pushing back. The union Starbucks Workers United is currently voting on whether to strike at up to 550 locations, meaning 12,000 of the company's 200,000 retail workers could soon walk off the job. Workers want better pay. They want better conditions. What are you prepared to give them? Well, we already give them the best job in retail. We have the lowest turnover in the industry. We also have the best benefits in the industry, and we actually have the best wages in the industry. They contend that reaching a union contract would cost Starbucks less than an average day of sales. Look, all I can tell you is what their request to date has been unreasonable. We're willing to negotiate and have them come back to the table and find a solution.
JO LING KENT:
00:03:47
Even in this economy, Niccol believes the best blend is yet to come. We have a softening labor market. We have inflation ticking up again. How worried are you that customers may cut that Starbucks run out of their routine? I mean, look, we're not seeing that right now. What we're seeing customers say is we're becoming more valuable to them.
JO LING KENT:
00:04:07
For CBSMornings, I'm Jo Ling Kent in Seattle.
