- Starbucks is relying on fewer customers who are spending more on their orders.
- Workers told Insider that customizations with the expectation of fast food delivery is unsustainable.
- Some workers say the company has not adjusted staffing needs appropriately to deal with the new volume.
- See more stories on Insider’s business page.
With the US job market heating up, a shift supervisor at an Atlanta Starbucks told Insider she’s leaving for a job with better pay and benefits. The final straw for leaving her job of two years, she said, was realizing how her pay compared to the increasingly pricey drinks Starbucks sells.
“The thing that really radicalized me was that our starting wage ($9) is less than one average customer’s ticket,” she told Insider.
Though pay varies across Starbucks locations, this supervisor’s experience is at the heart of the company’s strategy. The coffee chain relies on fewer customers who spend more on customized drinks. In the second quarter of 2021, US same store sales increased by 9% despite a 10% decline in number of transactions. The growth was driven by a 22% increase in average ticket size as orders grow larger and more complicated. Additions like different milks and sauces can increase that base price of a drink.
Mobile orders and drive-thru orders tend to be larger and more costly than in-store, according to Starbucks earnings, so many of the most complicated orders are coming through these channels. Drive-thru and pick-up mobile orders made up 80% of transactions before the coronavirus pandemic and have increased since then.
The chain continues to add customization options and new, multi-step drinks even as competitors pare down offerings to make drive-thrus more efficient. While drive-thru menu offerings are trending slimmer at most restaurants, some experts don’t expect that from Starbucks. “They have a ton of customization, and that’s not going away. They believe it’s a strength” Mark Kalinowski, founder of Kalinowski Equity Research, told Insider.
In 2020, Starbucks lagged behind coffee competitor Dunkin’ in terms of speed, according to QSR’s annual drive-thru study. While Starbucks is working to make drive-thrus more efficient, it isn’t trying to be the fastest drive-thru around, Kalinowski says. “Customization is much more meaningful for Starbucks,” he says, even if it means slightly longer waits.
Instead, Starbucks is more of a destination where customers spend time and money for a drink made to their exact specifications.
Workers say customization and speed are at odds
Erika, a Starbucks shift supervisor in Ohio, told Insider that as the business has changed to focus on customizations through drive-thru and mobile, the company has not adjusted staffing needs appropriately to deal with the new volume.
“Drinks are becoming increasingly more complicated as they are offered unlimited modifications, and people are still bored from lockdown so they visit us for a sense of normalcy,” she told Insider, explaining that the heavily modified drinks take more staff to make and keep lines moving.
Starbucks did not respond to Insider’s request for comment about customizing orders and the time they might take for workers.
Another supervisor in Pennsylvania told Insider that situation is the same at her location. “Custom drinks from social media like TikTok are also increasing the need for labor. These drinks are getting more and more complicated while the company is pushing for drive-thru times under 40-50 seconds,” she told Insider. These demands create an “impossible standard for partners to uphold” with “a large amount of stress on partners.”
While Erika would like to make those drinks for customers, she says supervisors expect the impossible, with strict limits on wait times in the drive-thru. It isn’t sustainable, she says, and creates a problem because people expect Starbucks to act as a quick service restaurant.”Simplification of our menu and restricting modifications would improve our speed, or set us up for success by labeling us as a custom beverage establishment that prides itself on the limitless modifications” she told Insider.
“We can’t do both. At least not staffed the way we are.”