NEW YORK — Brian Niccol, Starbucks chief executive officer, told investors the company will actively remove underperforming menu items as part of a disciplined push to improve store-level margins and service speed.
"When a drink or a new food innovation doesn't perform consistently, you have to have the plan to remove it," Niccol said.
The strategy targets a well-documented drag on Starbucks' profitability: complex custom orders that slow throughput, inflate labor costs and strain baristas at the chain's more than 38,000 stores globally. A leaner menu reduces training time for new employees and cuts inventory waste—two line items with direct impact on store-level margins.
Starbucks is targeting a 15-17 percent operating margin by fiscal 2028, a goal that hinges on cost discipline. Analysts at Wedbush Securities have flagged menu complexity as a persistent headwind to earnings-per-share growth and expect Niccol's push to improve labor productivity and customer throughput.
Over the past five years, Starbucks rolled out numerous seasonal and limited-time offerings. Some drove strong customer engagement; others added operational complexity without generating meaningful incremental sales or repeat visits.
Niccol's approach mirrors moves by McDonald's, which simplified its menu in recent years to lift service speed and customer satisfaction. For Starbucks, faster morning peak times could support higher average ticket values and improved daily traffic counts.
Shares have traded sideways for much of 2026 as investors weigh growth prospects against rising operational costs. Demonstrable margin improvement in upcoming quarters—watch for specific removal announcements and labor-productivity metrics—is the clearest catalyst for a re-rating. Starbucks is expected to provide further detail on its Q3 earnings call in early Aug.
