Starbucks has admitted its strategy of replacing staff with automation has failed, announcing plans to increase hiring and staff hours across its coffee shops worldwide.
CEO Brian Niccol revealed during an investor call that the company's previous approach of reducing store labor in favor of automated equipment had negatively impacted customer experience. "What we're finding is that wasn't an accurate assumption with what played out," Niccol stated.
The coffee giant will now focus on increasing staff numbers, having already expanded a pilot program to approximately 3,000 of its 36,000 global locations. The company is also slowing the rollout of its Siren craft system, technology originally designed to streamline drink preparation.
The shift comes as part of broader changes under Niccol's leadership since joining in September. The new strategy emphasizes personal touches like handwritten notes on cups, ceramic mugs for dine-in customers, and improved seating areas to encourage customers to linger.
However, the company continues to face challenges. Recent financial results showed disappointing performance with a 1% decline in global sales - marking the fifth consecutive quarterly decrease. While U.S. sales remained weak, the company reported growth in China and Canada.
The decision to increase staffing levels comes at a time when Starbucks is grappling with rising costs and price-conscious consumers, with some drinks now costing over £6. The company acknowledges that adding more staff will increase expenses but views it as necessary to improve customer service.
"Equipment doesn't solve the customer experience that we need to provide, but rather staffing the stores and deploying with this technology behind it does," Niccol explained to investors.
This strategic reversal represents one of several major changes implemented by Niccol, who became Starbucks' fourth CEO in less than three years with a potential sign-on package worth up to $113 million.