barista is overworked They try to create a constant flow, so complex customized drinks. Mobile ordering and staffing issues only exacerbate the problem; waiting time will be longer. There is often no place to sit. In other words, this is definitely not a place where you want to linger over a $3.45 coffee, let alone a $6.65 pumpkin spice latte.
Customers have noticed. The company announced a painful problem earnings report This week, it was revealed that fourth-quarter revenue fell 3% to $9.1 billion, with the Magic Retail Index (worldwide same-store sales for the quarter) down 7%. Ultimately, business challenges forced the $110 billion coffee chain to Pause instruction It was announced last week “to give us ample opportunity to complete our assessment of the business and solidify our key strategies” for the full year 2025.
Seattle-based Starbucks is betting that Rockstar’s new CEO Brian Niccol can turn things around with a strategic plan called “Back to Starbucks.” Nicol, who was offered a $113 million salary for the chief barista job, is an outsider to the company, which has had four different CEOs since 2022. Members of Starbucks’ board of directors have high hopes for the former Chipotle whiz who has replaced them. In September, to resolve a number of operational and labor issues. And analysts and experts say he has one important mission. It’s about making the in-store experience the comfortable yet affordable luxury it used to be.
“Starbucks used to have a lot of energy,” said Sharon Zachfir, an analyst at William Blair & Co., an investment bank and financial services firm. luck. “Starbucks just needs to figure out a way to get that love and affinity back.”
Nicol tackled the issue head-on during this week’s earnings call, discussing a return to the brand’s “core identity.”
“We have to get back to what has always made Starbucks stand out: the cozy coffee house where people come together.”
coffeeland burrito king
When it comes to creating a luxurious, temporary atmosphere, the devil is in the details. Nicole must find a way to maintain revenue from mobile and drive-thru orders while making the in-store experience desirable.
It’s hard to imagine a CEO more suited to our time, or one with more good intentions. Nicole brings extensive experience in the food and beverage industry, including stints at Chipotle and Taco Bell. Wall Street has high hopes for the 50-year-old executive, with Starbucks stock soaring 25% in September on news he would take over the company. But his operational skills and how they can solve Starbucks’ atmosphere problem will be tested.
Chipotle is “relentlessly focused on putting cogs in the burrito machine,” said Sean Dunlop, an analyst at financial services firm Morningstar. luck. On average, fast-casual Mexican chains are 25 main dishes in 15 minuteshe says, and in some places it can be more than that. Dunlop also said he thinks if people looked at Chipotle’s assembly line and Nicol could do the same thing at Starbucks, “we could solve all the speed of service problems.” Resolve employee grievances. ”
Nicoll said this week that Starbucks will work to reduce menu complexity and get all orders into customers’ hands within four minutes. He also envisioned separating the in-store experience from the mobile order pick-up experience, taming mobile apps with “common sense guardrails” and reining in highly customized drink orders.
“We’re encouraging people to customize their drinks, which is probably not the best way to customize a drink,” Nichol said, adding, “There’s some work to be done.”
love is gone
Starbucks is not the same and its customers are not the same.
“The Starbucks experience has fundamentally changed over the last five to 10 years,” Dunlop points out.
According to the company, mobile purchases now account for more than 30% of all orders. Combined with drive-thru orders, that amount can be offset. Around 70% Percentage of sales from U.S. stores operated by the company. Approximately 76% of drinks sold today are cold drinks, but the layout behind the counter doesn’t always accommodate that reality. The drinks customers order are also much more complex, sometimes adding factors such as: social media hijinx.
All these elements combine to waiting time will be longerthe burden on baristas becomes even greater. With a constant barrage of drink requests, you don’t have enough bandwidth to spend quality time or chat with customers.
Staffing-first approach
Michelle Eisen, 41, has worked at Starbucks for 14 years and currently works at a store in Buffalo, New York. She is also a member and bargaining representative for the Starbucks union, and is from the first store to win a union. She says the workload has changed “significantly” over the past five years in terms of “the pressures on the hourly workers, baristas and shift supervisors who are on the store floor every day.”
Investing in the quality of your food, making sure your customers have seating options, and choosing the right music depending on the time of day can all help make your store a place you’ll actually want to spend time in. But these time-limited baristas are a bigger impediment to the kind of atmosphere Starbucks is trying to create than the tables and chairs, said economist Stephen Meyer, a professor at Columbia Business School. says. He added that it’s not the art or furniture that creates a cozy “third space,” but the employees that make customers feel special.
“In my opinion, the customer experience has to come through the employee experience,” Meyer says. “I think we need to figure out how to free up capacity operationally so baristas can really focus on the human side.”
Starbucks may need to hire more employees to fix its atmosphere and operations problems. “I think you could probably argue that labor productivity is too high and we need to add more labor to restore the experiential differentiation that made Starbucks what it is today,” Zack Fear said. he says.
Eisen agrees that better schedules and more employees are key so that three baristas don’t have the same burden as six. “It costs extra wages, extra labor costs, but it gets paid in the end,” she says. “This creates a positive experience for the barista and hopefully helps with employee retention. It also creates a more positive experience for the customer because they know their order is being taken seriously. .”
In recent years, Starbucks 500 stores Voted to unionize on behalf of over 11,000 baristas. Former CEO Howard Schultz had this to say: not necessarily enthusiastic. Mr Nicol has taken a more conciliatory attitude towards unions. Depending on open letter In September, Nicole wrote that the union was “determined to continue bargaining in good faith.”
Rachel Ruggeri, Starbucks’ chief financial officer, said on an earnings call this week that the company is increasing the number of hours per partner, which is contributing to sales, but that it needs to resolve staffing issues. He said there was still work to be done. Nicol also mentioned the barista experience, and first on the list of changes the company is making is staffing.
“Our efforts to ensure partners have the hours and schedules they desire are working,” he said. “Going forward, we need to make sure we have the right number of partners on the floor, especially during morning peak hours and after hours.” He said the company is developing leaders from within and will continue to grow in 2025. He added that the company is planning a conference for store managers.
Zarian Pouncey, 30, has worked at Starbucks for 11 years. He is also a union member and bargaining representative for Starbucks Workers United. He would like to see some level of comfort return to the store itself. Where he works in Las Vegas, chairs were removed several years ago and replaced with wooden stools. Outlets have also been removed. But he is optimistic about the future.
“I’m hopeful,” he says. “If we can slow down a little bit, simplify things and get back to what coffee shop culture is all about, we can get back to a place where baristas are happy.”
