On Tuesday, Starbucks launched a “Reinvention” plan to update its existing shops with faster technology and open new locations that would solely provide delivery and a drive-thru.
The strategy would raise Starbucks’ shop expansion pace in the US from 450 to 2,000 yearly at a cost to the firm of $450 million.
The new strategy will be implemented gradually over the course of two years beginning next month.
Outgoing Chief Operating Officer John Culver said the “Reinvention” plan would also include a new rewards programme called Starbucks Odyssey and aim to automate most of the coffee-making without any job cutbacks.
The 20-hour cold brew process will soon only take 4 hours thanks to the new automated technologies, which will cut the time it takes to prepare a Frappuccino in half, from 86 to 35 seconds.
The firm has seen a massive increase in beverage sales, most of which it owes to Gen-craze Z’s for highly personalised cold beverages.
Customers now really demand customization, according to Starbucks Chief Marketing Officer Brady Brewer.
The statistics underlying Starbucks’ impressive sales reveal that drive-thru locations accounted for 86% of new store openings in 2022, while café stores made up only 3% of those openings.
The firm intends to open 2% café-only locations, 44% drive-thru café locations, 35% drive-thru only locations, and 14% pick up only locations.
Culver said current locations that are constructed in the conventional Starbucks café style were developed for a different period and must change to fit what consumers desire.
Executive Katie Young warned that underperforming shops could have to shut.
The Covid-19 epidemic, according to Starbucks CEO Howard Schultz, has altered how consumers engage with the business since they “no longer come to the shop the way they used to.”
Despite only being accessible for eight months, he said that Starbucks delivery had increased sales because of the use of delivery applications like UberEats and Doordash.
However, not everyone is pleased with the planned adjustments; 400 Starbucks Workers United protesters gathered in front of the headquarters.
244 of the 8,900 Starbucks shops owned by corporations have joined the union as a result of the group’s efforts, which are the most visible in the push to unionise Starbucks outlets nationwide.
The business has a strong anti-union position, and union advocates claim the business dismissed union sympathisers unfairly and refused to give them increases.
The protesters want to inform investors of the problems they are facing, according to Arthur Pratt, a worker at a unionised Starbucks location in Portland, who spoke to the Seattle Times.
We are aware that Howard Schultz has made it plain that he would never, ever reverse his position on unions, Pratt added. We will thus approach the investors.
Pratt said that rather than investing in new machines and equipment, Starbucks should focus on employing more staff. He said that despite the unsanitary restroom, the business will not recruit another employee for his establishment.
Starbucks claims that the unions are a “third-party” organisation that is dividing workers and management.
A Starbucks representative remarked, “We feel we can accomplish more for our partners working side by side than across a negotiation table.”
Investors were informed by executives that they feel the moment is right to improve operations and spur development.
We’re speeding up development, Culver said. “We have a chance to recreate the firm at this particular period,” the speaker said.