Starbucks Cuts Back On Production At US Plants To Curb Costs – CoffeeTalk

Starbucks is cutting two days of weekly production at its five US plants to cut costs and improve efficiency. The plants, located in Georgia, South Carolina, Pennsylvania, Nevada, and Washington state, will adopt a new five-day schedule in January. The plants produce coffee for the chain’s own stores and some packaged coffee sold under the Starbucks brand at grocery stores and other retailers. The company does most of its own coffee purchasing, roasting, packaging, and distribution.

Starbucks is working to bounce back from six straight quarters of same-store sales declines by making cafes more inviting, upgrading decor, adding more seats and power outlets, overhauling the menu, reducing wait times, and improving customer service. Chief Financial Officer Cathy Smith has said the company needs to manage spending to fund these initiatives, which include $500 million towards adding staff to stores. To compensate, Starbucks has asked executives to rein in spending and is offering $6 million stock grants payable only if the company meets a goal to cut operating expenses.

Analysts expect Starbucks’ same-store sales to rise slightly in the current quarter, though they have scaled back their expectations in recent weeks. The restaurant industry is facing a difficult environment as consumer sentiment shifts due to President Donald Trump’s trade policy changes, inflation picks up, and job growth slows significantly. Starbucks also has roasting, manufacturing, and distribution facilities in the Netherlands, India, and China.

Read More @ Bloomberg