New Starbucks chief executive Brian Niccol vowed to implement changes to the company, as struggling sales in its two biggest markets dragged on global sales this year.
Global comparable sales fell 7 per cent for the fourth quarter despite a 2 per cent increase in the average ticket, Starbucks reported after trading closed on Wednesday. It released its preliminary report last week and announced it was pushing back its 2025 outlook.
“Our financial results were very disappointing, and it is clear we need to fundamentally change our strategy to win back customers and return to growth,” Mr Niccol said during an earnings call.
Weighing the heaviest on Starbucks are dips in its two largest markets: the US and China. Stores in the US and China represent 61 per cent of Starbucks' global portfolio, with nearly 17,000 American shops.
The company faces a growing list of problems including pricey drinks for cost-conscious customers, complex drink orders, long waiting times and skeleton crews at its locations. Comparable sales in North America and the US dropped 6 per cent.
As part of its broader plans to simplify its menu, Starbucks on Tuesday announced it is eliminating its olive oil-infused beverages, less than a year after they made their debut.
Mr Niccol also said Starbucks will stop charging extra for dairy substitutions in its drinks in North American cafes beginning this holiday period.
Starbucks is also facing increased competition in China, where comparable sales fell 14 per cent in the fourth quarter.
For the full fiscal year, same store sales declined 2 per cent. International and China comparable store sales declined 4 per cent and 8 per cent, respectively.
Mr Niccol said the company is in the process of implementing four changes to its strategy, including decluttering its menu. He said the company is looking to bring back the “third place” experience after a massive shift to drive-through ordering, increasing staff and streamlining mobile ordering, while bringing back its coffee condiment bar.
He acknowledged that the company has focused too heavily on its rewards customers.
“Everything I have seen and heard tells me we have significant strengths to build on,” Mr Niccol said during an earnings call.
Starbucks lured him from Chipotle this year in an effort to reverse its declining sales.
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The Abu Dhabi Awards explained:
What are the awards? They honour anyone who has made a contribution to life in Abu Dhabi.
Are they open to only Emiratis? The awards are open to anyone, regardless of age or nationality, living anywhere in the world.
When do nominations close? The process concludes on December 31.
How do I nominate someone? Through the website.
When is the ceremony? The awards event will take place early next year.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Company profile
Name: Dukkantek
Started: January 2021
Founders: Sanad Yaghi, Ali Al Sayegh and Shadi Joulani
Based: UAE
Number of employees: 140
Sector: B2B Vertical SaaS(software as a service)
Investment: $5.2 million
Funding stage: Seed round
Investors: Global Founders Capital, Colle Capital Partners, Wamda Capital, Plug and Play, Comma Capital, Nowais Capital, Annex Investments and AMK Investment Office
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25 Evacuation of injured and sick
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Most sought after workplace benefits in the UAE
- Flexible work arrangements
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- Insurance coverage for optical, dental, alternative medicine, cancer screening
- Financial well-being incentives
The specs: 2018 Volkswagen Teramont
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Engine 3.6-litre V6
Gearbox Eight-speed automatic
Power 280hp @ 6,200rpm
Torque 360Nm @ 2,750rpm
Fuel economy, combined 11.7L / 100km
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