How did Starbucks 'fall from grace'?

Starbucks is the chain that brought gourmet coffee to the masses. But it has stumbled of late. The company's new top executive has a plan to make Starbucks the place to go — again — for caffeine and companionship.

New CEO Brian Niccol plans to slash Starbucks' "notably intricate menu" by 30% in order to simplify ordering and reduce wait times, said Fortune. That will give "baristas the opportunity to demonstrate their craft and the time to connect with our customers," Niccol said. Other changes are designed to make Starbucks a bit more like the "third place" — where people can meet outside of home and work — it once aspired to be: A condiment bar for milk and sugar is returning to stores, as are ceramic mugs and handwritten messages on to-go cups to "revitalize the brand's community coffeehouse vibe."

Niccol "wants to make Starbucks a coffee shop again," CNN said. He is considered a "Mr. Fix-It" in the restaurant industry, having previously overseen turnarounds at Chipotle and Taco Bell. That kind of help is needed at Starbucks, where sales had fallen for two straight quarters before Niccol was hired in late 2024. In recent years the chain has shifted from a sit-down model to a place where customers order on an app and get their drinks to go. In the process, customers have registered dissatisfaction with "high prices, slow pickup orders on Starbucks' app and lackluster food options," CNN said. "There's a shared sense that we have drifted from our core," Niccol said.

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Consumers are pulling back

Starbucks is not alone in facing challenges. A "long-predicted consumer pullback" is hitting the broader fast food industry too, said CNBC, with McDonald's, KFC and Pizza Hut also facing challenges. Economists had long expected that inflation — in the form of higher product prices — and high interest rates would prompt Americans to slow down their purchases of chocolate cream cold brews and Big Macs. Now that moment is here.

But Starbucks has specific problems. The company has "strong mobile order and pay sales," said QSR, an industry magazine. The data also shows that a large number of potential customers — in the "mid-teens percent" — use the Starbucks app to start an order, but bail out before completing the purchase. This suggests concerns about "long wait times" are playing a role.

For years, Starbucks was the only real premium coffee option for most consumers. But that is no longer true. "More and more coffee houses have sprouted up," said financial news service Seeking Alpha. They have Wi-Fi and good coffee drinks, too. "The bottom line is that growth will be much harder to achieve going forward," the outlet added.

Stumbles in China

Starbucks' issues go beyond American consumers. The company made a big bet on building new stores in China but now its "ambitious expansion plans are lagging," said Quartz. Starbucks announced in 2022 it would open one new store every nine hours in China — but it ran into competition from Luckin Coffee, a homegrown operation with more than 16,000 locations.

There is plenty of work to be done back home. The company announced in late February 2025 it is cutting 1,100 corporate jobs to "streamline operations," said The Washington Post. After that, Niccol believes a "smaller menu will be better for business," said The Wall Street Journal. The Starbucks donut is a "slower-selling item" that will go by the wayside, and drink options will also be considerably reduced. Workers "forget the recipes for drinks they rarely sell," resulting in a frustrating experience for customers. "I'm like, why are we doing this to ourselves?" Niccol said. Coffee drinkers will start to see changes to the Starbucks menu in March.