Starbucks plans to get back to the neighborhood coffeehouse vibe

Starbucks Corporation (NASDAQ:SBUX) outlined some of the traffic headwinds it saw in the U.S., China, and other global markets during the company’s earnings conference call. The company suspended its guidance for FY25, but said it still sees store growth opportunities because new stores in low-density regions are outperforming.

CEO Brian Niccol made his highly anticipated appearance on the call. Niccol said the earnings results were very disappointing. He wants Starbucks (SBUX) stores to be a welcoming coffeehouse where people gather and where the company serves the finest coffee handcrafted by skilled baristas. A top priority is to improve the time it takes for store customers to receive their orders and to separate the

As part of an appeal to the coffeehouse vibe, Niccol said Starbucks (SBUX) plans to bring back condiment coffee bars in all cafes by early 2025, offer ceramic mugs again, and bring back more comfortable seating and amenities to make stores a place where customers want to gather. Customers will also have more high-quality brewed coffee options as part of the reset.

An area that Starbucks (SBUX) plans to put in some guardrails is with order customization, as part of a strategy to improve through-put. The company is also removing extra charges for non-dairy milk orders, beginning on November 7.

Outside the U.S., Niccol noted the China turnaround could take some time, but was optimistic about the opportunities in new international markets.

Notably, Starbucks (SBUX) said it would not raise prices in North America in FY25.

Shares of Starbucks (SBUX) traded flat at $97.30 in the postmarket session. The new strategy at Starbucks (SBUX) could have implications for rivals such as Dunkin’ Donuts, Dutch Bros. (BROS), and Panera.