Baristas are overworked as they try to create a constant stream complicated customized drinks. Mobile ordering and staffing issues have only exacerbated the problem and added to it longer wait times. Often there is nowhere to sit. In short, it’s the last place anyone would want to grab a $3.45 cup of coffee, let alone a $6.65 pumpkin spice latte.
Customers have noticed. The company released a painkiller earnings report this week, it revealed that fourth-quarter revenue fell 3% to $9.1 billion, while the magic retail metric (global comparable-store sales for the quarter) fell 7%. Ultimately, business challenges drove the $110 billion coffee chain stop guide last week for the full financial year 2025 “to provide ample opportunity to assess the business and consolidate key strategies.”
Seattle’s Starbucks is betting new rockstar CEO Brian Niccol can turn things around with a strategic plan called “Back to Starbucks.” Niccol, who was he? He offered a salary of 113 million dollars to take the position of head barista, he is an outsider to the company, which has had four general managers since 2022. Chipotle wunderkind, took office in September, to fix the crowd operational and labor issues. And analysts and experts say it has one key mission: to make the in-store experience once a pleasant and affordable luxury.
“Starbucks had an energy about it,” said Sharon Zackfia, an analyst at William Blair & Co., an investment banking and financial services firm. luck. “Starbucks needs to figure out how to recapture that love and belonging.”
Niccol addressed the issue on the company’s earnings call this week, discussing a return to the brand’s “core identity.”
“We need to get back to what has always set Starbucks apart: a welcoming coffee shop where people gather.”
King burrito on coffee grounds
The devil is in the details when it comes to crafting a luxurious, ephemeral atmosphere. Niccol needs to figure out a way to maintain mobile and drive-thru revenue while making the in-store experience as intended.
It’s hard to imagine a CEO better suited to the moment, or with as much goodwill behind it. Niccol brings extensive experience in the food and beverage space, with stints at Chipotle and Taco Bell. Wall Street has high hopes for the 50-year-old executive: Starbucks shares surged 25% in September on reports he would take over the company. But his operational chops and how they can fix Starbucks’ atmospheric problems will be tested.
Chipotle is focused on “getting the gears into their burrito machine without being dumb,” said Sean Dunlop, an analyst at financial services firm Morningstar. luck. The average Mexican fast-casual chain can do it all around 25 entries in 15 minutessays, and some places can do much more than that. Dunlop also says people are looking at Chipotle’s assembly line and thinking that if Niccol did the same thing at Starbucks, “we can fix all the service speeds. We can fix the employee dissatisfaction issues.”
Niccol said this week that it will be Starbucks slimming down its complex menuand working to get each order into a customer’s hands within four minutes. It also planned to separate the in-store experience from the mobile ordering experience, tame the mobile app with some “common-sense guardrails” and holding highly personalized drink orders.
“We kind of encourage people to customize drinks that aren’t the best way to run the drink,” Niccol said, adding that “we have some cleanup to do.”
The love is gone
Starbucks is not what it used to be, and neither are the customers.
“The Starbucks experience has changed fundamentally over the last five to 10 years,” Dunlop said.
Mobile purchases now account for more than 30% of all orders, according to the company. Combined with drive-thru orders, they seem to make up about 70% the number of sales in American stores operated by the company. Approximately 76% of beverages sold today are cold drinks, but back counter design is not always equipped for this reality. And the drinks customers order have also become much more complicated, and sometimes fueled social media hijinx.
All these factors have combined to create longer wait timesand heavier workloads for baristas. Bombarded with a constant stream of drink orders, they don’t have much bandwidth to spend much quality time or talk to customers.
First view of employees
Michelle Eisen, 41, has been with Starbucks for 14 years and currently works at a location in Buffalo, NY. Starbucks is also a member of the Workers United union, serves as a bargaining representative and is the first store to win the union. He says the workload has changed “tremendously” over the past five years, “in terms of the pressure on the hourly workers, baristas and shift managers who are on the floors of these stores every day.”
Investing in the quality of the food, making sure there are seating options for the customers in attendance, and choosing the right music for the right time of day all go a long way in making stores comfortable, where you actually want to spend time. But those overtime baristas are a bigger hurdle than Starbucks could be with tables and chairs, says Stephan Meier, an economist and professor at Columbia Business School. It is not the art or the furniture that creates a pleasant “third space”, but the employees that make the customers feel special.
“The customer experience, in my opinion, has to come from the employee experience,” says Meier. “I think they need to figure out how to free up the capacity of the baristas to really focus on the human side of how they operate.”
In order for Starbucks to fix its atmosphere and operational issues, it may need to hire more employees. “I think you could say that labor productivity is too high and they need to add more work to restore some of the experiential differentiation that made Starbucks what it is today,” Zackfia says.
Eisen agrees that better scheduling and more staff are key so that three bartenders don’t have to carry a load more suitable for six people. “It’s extra wages, it’s extra labor costs, but it pays off in the end,” he says. “It creates a positive experience for the bartender, and hopefully helps with employee retention. And it creates a much more positive experience for the customer, as they see that their requests are being taken seriously.’
In recent years, 500 Starbucks stores they have voted in favor of the union, representing more than 11,000 baristas. It was a response from previous CEO Howard Schultz not always enthusiastic. Niccol has taken a more friendly tone with the union. in response to a open letter from the union, Niccol wrote in September that he was “committed to continuing to negotiate in good faith.”
Starbucks CEO Rachel Ruggeri said on this week’s earnings call that the company had increased hours per associate, which was helping turnover, but had more work to do to help with staffing issues. Niccol also addressed the barista experience, citing staff first on the list of changes the company is making.
“Our efforts to get the hours and schedules that members want are working,” he said. “Now we have to make sure we have the right number of partners on the ground, especially in the morning hours.” He added that the company was cultivating leaders from its own ranks, and was planning a conference for store managers in 2025.
Zarian Pouncy, 30, has been a Starbucks employee for 11 years. He is also a union member and bargaining delegate for Starbucks Workers United. He would like to bring some level of convenience back to stores. The location he works in Las Vegas got rid of the chairs a few years ago, and now has wooden stools. He has also removed the electrical outlets. But he is optimistic about the future.
“I’m hopeful,” he says. “Once we slow down, simplify things, go back to what coffee shop culture was, we can go back to a place where baristas can be happy.”
