Starbucks CEO Brian Niccol Starbucks turnaround plan one year

After two decades going to Starbucks every day at 4:30 a.m., longtime customer Tony Dennis abandoned the company last year.

“I was frustrated,” he told CNBC.

The customer experience he used to love had disappeared. Baristas didn’t engage with him, despite his daily visits. At the same time, the cost of his double-shot tall nonfat lattes and double-shot tall nonfat cappuccinos kept climbing.

The 65-year-old Las Vegas real estate developer wasn’t the only Starbucks customer who no longer felt the same loyalty. Following a drift of customers away from the chain and two disastrous earnings reports, Starbucks’ board ousted then-CEO Laxman Narasimhan and poached Brian Niccol from Chipotle, where he led a turnaround after the burrito chain’s foodborne illness scandal.

Tuesday marks Niccol’s one-year anniversary at the coffee giant, and reviews of his push to revamp the chain are mixed. Same-store sales and traffic are still shrinking as customers choose to caffeinate at home or switch to newer competitors, like Dutch Bros. or 7 Brew.

Some of Niccol’s changes have rankled customers and baristas. And investors are realizing that a comeback might take longer than they initially predicted. The stock has fallen 7% since Niccol took the reins.

“Obviously, there’s a lot of excitement when he comes in, he’s going to make a lot of immediate changes. But I think the reality is that this doesn’t happen overnight,” said Logan Reich, RBC Capital Markets analyst.

From his first week at the helm of the company, Niccol pledged to bring the coffee giant “back to Starbucks,” returning to its roots as a so-called third place to reverse the chain’s troubling sales declines. Wall Street liked his plans and his resume, which included leading Yum Brands’ Taco Bell and presiding over a successful turnaround at Chipotle. Former CEO Howard Schultz, who turned Starbucks into a global coffee giant, gave his blessing for the hiring and has supported his turnaround strategy.

While the effort has not gone as smoothly as Niccol’s champions would have expected, there are still promising signs. The company posted its best-ever U.S. sales week for company-owned locations when the pumpkin spice latte and other fall drinks returned to menus last month. Starbucks is accelerating its rollout of its “Green Apron Service” program designed to improve hospitality, citing improved sales at test locations.

Niccol himself has said the turnaround is ahead of schedule.

“What we’re really excited about is we’re seeing both non-Rewards customers come back in a big way, as well as Rewards customers. That is, to me, the sign that we’re doing the right things, both in the store and outside of the store,” Niccol told CNBC’s Kate Rogers in an interview that aired on Tuesday.

For Starbucks’ new era, Niccol turned back to the coffee chain’s early days.

Under Niccol’s leadership, the early stages of the turnaround plan came together quickly. He said he spent several weeks talking with customers and employees before stepping into the role, which shaped his early ideas about how to fix the company and bring it back to its former glory.

He named reviving the U.S. business as his initial priority. To draw customers back, its marketing would focus on coffee. Orders would be ready in four minutes or less. The drink pickup stations would no longer be chaotic.

Its stores — now internally called “coffeehouses” — are becoming cozier and more welcoming to customers who wanted to linger. Familiar touches, like the condiment bar, have reappeared. Unpopular menu items, like the Royal English Breakfast Latte and the White Hot Chocolate, have disappeared.

Some customers are already coming back.

Dennis saw the changes at his local Starbucks taking hold in real time over the last six-to-nine months. A temporary defection to Dunkin’ didn’t stick. He prefers to drink his coffee inside a cafe, lingering for an hour or two to get started on his workday and chat with other regulars.

“What drove me back is that the alternatives are no better, and I’ve seen the changes — there’s an engagement, there’s a commitment to the customer experience again, to create a place for people to hang and have fun and be social,” Dennis said.

But not all of Niccol’s changes have been well received.

Take his mandate that baristas would start writing messages with Sharpies on drink cups again. The practice dates to the analog days, when baristas needed to write customers’ names manually to differentiate orders. But by 2016, stickers replaced handwriting as mobile ordering grew more popular, and the practice completely…