APRIL 29 – Starbucks will hire more baristas and scale back plans to roll out automation, the coffee shop giant’s chief executive Brian Niccol says.
The move, which is part of his strategy to win back customers, comes as other food and drink chains increasingly adopt technology to cut costs.
Also on Tuesday, the firm announced worse-than-expected financial results as its sales continue to fall.
Mr Niccol was brought into Starbucks last year tasked with turning the business around as it struggles with rising prices and consumers cut back spending.
“Over the last couple of years, we’ve actually been removing labour from the stores. I think with the hope that equipment could offset the removal of the labour,” Mr Niccol said during a call with investors.
“What we’re finding is… that wasn’t an accurate assumption with what played out.”
Increasing staff numbers was tested in a handful of stores around the time Mr Niccol joined the firm in September 2024. He has been expanding the approach to include around 3,000 stores this year.
At the same time the firm said it will pull back from deploying its Siren Craft System.
Named after the iconic Starbucks logo, it is a suite of technology and equipment that was introduced in 2022 to streamline drink-making.
Mr Niccol highlighted that taking on more staff would mean higher costs but said he was “banking on some growth to come with the investment”.
Alongside recruiting more baristas, Starbucks is also revamping its coffee shops, menus and the company’s dress code.
Starbucks said in April that its baristas would wear dark, single coloured shirts to “allow our iconic green apron to shine and create a sense of familiarity for our customers”.
In January, it reversed rules for its cafes in North America that allowed people to use their facilities even if they had not bought anything.
The changes were a U-turn from a policy introduced six years ago that allowed people to linger in Starbucks outlets and use their toilets without making a purchase.
So far Mr Niccol’s turnaround efforts have seen limited results.
The company’s latest financial figures showed that global sales fell by 1% in the three months to the end of March, the fifth quarterly decline in a row.
But while trading continued to show weakness in the US, which is its biggest market, sales rose in China and Canada.
Starbucks shares fell by more than 6.5% in extended trading after the earnings were announced.
By BBC
