Inside Starbucks’ Plans to Improve Stores for Customers and Baristas


Starbucks is implementing its Siren Craft System, a series of changes in how orders are processed and made to reduce bottlenecks and long wait times in its stores. The company is working to win back occasional customers as some Americans become cost-conscious due to ongoing inflation. In stores where the Siren system has been used to optimize operations, peak throughput has increased, which it estimates will boost same-store sales annually.

Over 10% of Starbucks’ 10,000 stores have already implemented the system, which includes changing the production order for hot and cold drinks. It will be in use across North America by the end of July. Executives hope these changes will provide a much-needed boost to Starbucks, as it reported a disappointing second quarter with U.S. same-store sales falling 3% and traffic dropping 7%.

Katie Young, senior vice president of store operations at Starbucks, said the most immediate shift needed to happen in cafes was better handling the unexpected. The most immediate shift needed to happen in cafes is better handling the unexpected, as it allows Starbucks to flexibly respond to things we cannot predict.

Store changes will be key this month, as Starbucks opened up its app to non-rewards members, which the company believes will increase traffic and orders. Analyst Peter Saleh, managing director at BTIG, said that Starbucks has a lot of demand in certain stores and the kitchen’s small footprint needs to be more efficient.

Losing customers due to slow orders and other store frustrations could cost Starbucks at a particularly vulnerable time, as Americans have become cost-conscious due to ongoing inflation. Starbucks has done something unusual in recent weeks by joining the stream of value offerings with a $5 food and beverage combo option.

Starbucks has been working on a bottleneck issue since its reinvention plan rollout in 2022, with changes underway in cafes to be rolled out over the years. The Siren system processes were developed with worker feedback on which issues stopped them from creating beverages and connecting with customers. Starbucks plans to add a role akin to an expediter in a restaurant production line, a “play caller,” who steps away from production and helps solve logjams in cafes, handling tasks such as restocking cups or helping when an unexpected crowd arrives. The company plans to train existing workers for the role or potentially add new baristas, if needed.

One of the pain points was the espresso machine being often running all the time, which kept partners from being able to check in and knowing which part of the store would get crowded. Starbucks also plans to change the order in which beverages are made, as cold drinks were prioritized from start to finish, even if a hot beverage order came in first, as pulling espresso shots was the last step. This could create a traffic jam in the drive-thru, for example, if a person ordered one of each beverage, as the cold item would be ready while the hot drink was still in production.

Baristas will have more control over the company’s digital production manager, an iPad system that controls the sequencing of orders in various channels from cafes, mobile orders, and the drive-thru. Workers will have more flexibility over changing order priority. The Starbucks app changes added a sense of urgency to the Siren training rollout, and mobile order and pay will also be available on third-party platforms to reach more customers.

The potential increase in traffic and workloads comes as some baristas have raised issues about staffing and scheduling, particularly employees who have sought to organize with the Workers United union. Starbucks says it has made significant progress over the past two years on staffing and scheduling.

BTIG’s Saleh said the company has moved uncharacteristically slowly, but the Siren system changes have provided a “material reduction” in wait times for orders. Starbucks estimates that in stores where the company has used the Siren system to optimize operations, it has seen an increase in the number of customers served at peak times that it estimates to be worth 1 percentage point of comparable sales annually.

Read More @ CNBC

Source: Coffee Talk

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