Longer Wait Times at Starbucks: The Impact of Staffing Cuts and Increased Store Openings
Introduction:
Starbucks customers are experiencing longer wait times for their coffee orders, with baristas claiming that staffing cuts have left them overworked and unable to keep up with the influx of orders from mobile apps, in-store, and drive-thrus. Data compiled by Technomic and cited by Bloomberg News reveals that Starbucks customers are waiting longer compared to their peers at competitors like Dunkin’ and Caribou.
The Impact of Job Cuts and Store Openings:
In the last quarter, approximately 8% of Starbucks customers had to wait between 15 and 30 minutes for their orders. This is a significant increase compared to the pre-pandemic period when such long wait times were virtually non-existent. The company’s expansion, with the addition of 380 stores nationwide, has contributed to the strain on staffing. Surprisingly, while Starbucks increased its US footprint, it laid off around 29,000 in-store workers during the same period, according to SEC filings. This reduction in workforce has resulted in increased burdens on baristas and longer wait times for customers.
Customer Experiences:
One customer, Chris Mills, shared his frustrating experience at a Starbucks store in Shelton, Conn. On Mother’s Day, he had to wait a staggering 40 minutes for his wife’s latte. Mills observed six baristas struggling to fulfill orders and noticed that nobody, including the staff and other customers, seemed happy about the situation. This anecdote highlights the impact of understaffing on both employees and customers.
The Company’s Response:
Starbucks denies that its stores are understaffed. Frank Britt, Starbucks’ chief reinvention officer, explains that the coffee chain has implemented a new algorithm to allocate labor and manpower. The algorithm considers factors such as order forecasts and product availability to determine the necessary staffing levels at specific locations. However, employees argue that the algorithm fails to account for additional work required to fulfill special requests on orders, such as adding cold foam or extra espresso shots. Promotions are also not factored into the algorithm’s calculations, further exacerbating the staffing issue.
Updates and Criticism:
Starbucks claims to have updated its algorithm in the last 18 months to ensure enough capacity to meet demand. When confronted with Chris Mills’ experience, Britt acknowledged that it was “unacceptable” and emphasized Starbucks’ responsibility to improve. The company even posted a blog item highlighting its “staffing precision” technology that considers historical and current trends, promotions, and product offerings. However, former CEO Howard Schultz has called for a revamping of Starbucks’ US-based operations to prioritize an unwavering focus on the customer experience.
Financial Impact and Future Outlook:
Starbucks’ most recent quarterly earnings report disappointed Wall Street, resulting in a 16% drop in the stock. The company cited economic headwinds in China and high inflation in the US as factors affecting its bottom line. As a result, Starbucks reduced its annual forecasts and reported a 15% decrease in net income and a 2% decline in revenue for the quarter. The poor showing has increased pressure on current CEO Laxman Narasimhan to address the company’s earnings results.
Conclusion:
Starbucks customers are facing longer wait times due to staffing cuts and the opening of numerous new stores. The company’s algorithm for labor allocation has been criticized for failing to consider special requests and promotions. Former CEO Howard Schultz has called for a renewed focus on improving the customer experience. With disappointing financial results, Starbucks faces challenges in addressing economic headwinds and high inflation. It remains to be seen how the company will navigate these issues and work towards improving wait times for its loyal customers.
