Starbucks hires more baristas and scales back automation, including the Siren Craft System, to improve customer experience and reverse sales decline after poor financial performance, also revamping stores and dress code.
Starbucks Rethinks Automation, Hires More Baristas
- Starbucks is hiring more baristas and scaling back automation plans to win back customers.
- CEO Brian Niccol aims to improve customer experience after sales decline.
- This reverses the trend of food/drink chains using tech to cut costs.
- Financial results were worse than expected with sales continuing to fall.
Labor vs. Automation: Acknowledging the Imbalance
- Starbucks removed labor in past years, hoping equipment would compensate.
- Niccol admitted this assumption was inaccurate.
- More staff were tested in some stores starting September 2024 with positive outcomes.
- The approach is expanding to 3,000 stores this year.
Siren Craft System Scaled Back
- The Siren Craft System, tech introduced in 2022 to streamline drink-making, will be pulled back.
Investing in Growth
- More staff means higher costs, but Starbucks expects growth to come from the investment.
Other Changes
- Starbucks is also revamping coffee shops, menus, and the company's dress code. Baristas now wear dark, single-colored shirts to showcase the green apron.
- In January, reversed rules in North America that allowed non-customers to use facilities.
Financial Performance
- Global sales fell 1% in the three months ending March (fifth quarterly decline).
- Sales rose in China and Canada, but US trading remained weak.
- Starbucks shares fell over 6.5% after the earnings announcement