Earlier this month, the Financial Times reported that Starbucks had explored a takeover of Chipotle, a deal valued at close to $39 billion that would have reunited CEO Brian Niccol with the chain he ran for six years. Together, the two would have topped $41 billion in annual U.S. systemwide sales.
Four days later, a Starbucks spokesperson told FOXBusiness the company is not buying Chipotle and that its team is focused on executing its Back to Starbucks strategy.
Whether talks ever got serious, the denial is the interesting part. Starbucks is in the middle of a turnaround. Under Niccol, it has posted four straight quarters of comparable sales growth, and in July he said himself that there is more work to do.
A blockbuster acquisition is exciting. It is also a handy way to stop looking at the slower job in front of you. At least one analyst warned that a deal could pull Niccol’s attention away from the stores.
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Niccol’s plan leans on staffing, shorter waits, and bringing back the coffeehouse feel that helped make Starbucks famous. There is no clever financial engineering in it. It is a positioning fix at heart: make the thing customers already buy worth what it costs, and make sure they can see that when they walk in.
Small-business owners face the same temptation when sales stall. You reach for something big — a price cut, a new service line, a rebrand, a competitor you could buy. Each one feels decisive. Each one lets you avoid a plainer question: do my customers still know what they are paying for?
I see this most with owners who think they have a pricing problem. They raise a number, lose a client or two, and conclude the market can’t take it. Often the clients who left never understood the result they were getting. When a customer can’t say what you do for them, the only thing left to compare is the invoice.