Starbucks is bucking the trend by hiring more baristas and scaling back on automation. CEO Brian Niccol says the move is part of a broader strategy to attract customers back to stores after five straight quarters of declining sales.
The coffee giant’s latest earnings report showed a 1% drop in global sales over the past three months, ending in March. This disappointing performance comes as many restaurants and cafes are turning to technology to cut labor costs. Niccol revealed that over the past two years, Starbucks had tried to reduce its workforce, thinking machines could take over. But this didn’t work out as planned.
Back to Basics
Starbucks has started experimenting with hiring more staff in some locations since Niccol took the helm. This approach is now being rolled out to over 3,000 stores. The company is also dialing back its use of the Siren system, an automated technology introduced in 2022 to speed up drink preparation. While hiring more baristas will increase costs, Niccol is confident that this investment will drive long-term growth.
Other changes are also underway. Starbucks is updating its stores, menus, and dress code for employees. In April, the company announced that baristas would have to wear dark-colored shirts to make their signature green aprons stand out. This move aims to create a more familiar and welcoming atmosphere for customers. Earlier in January, Starbucks had ended its longstanding policy of allowing customers to use store facilities without making a purchase.
Mixed Results
Despite these efforts, results have been mixed. US sales remain sluggish, but there are signs of growth in China and Canada. Following the earnings report, Starbucks’ stock price plummeted by over 6.5% in after-hours trading.
Source: BBC