I’ve never been shy to admit I’m a Starbucks addict. I like the coffee, and its uniformity means I can visit any shop across the nation and get the exact same cold brew I love. But recently, there have been changes in the experience. I’m still able to get my coffee, but something feels off.
Yes, the past two years have been hard on retail stores, and Starbucks was impacted (of course). The company was forced to implement social distancing, but it was poised for success in other areas. Specifically, as one of the best mobile apps for ordering ahead, and it existed prior to the pandemic.
So when the structure of retail changed, Starbucks didn’t need to change its app — it needed to change its employees.
But the truth is, the whole landscape is changing. Starbucks was in a relatively great position to survive pandemic-related complications going into 2020, but now we’re in a very different climate and dealing with new struggles. This will bring changes that some people will benefit from, and other people will be the losers.
Spoiler alert: The companies win, the customers won’t, and the employees definitely won’t.
What Changed at Starbucks?
Before the pandemic, Starbucks was a versatile place. Customers didn’t just go to the stores for coffee and food, they’d use the wifi or meet a friend. Then, the pandemic happened and understandably forced distance between customers and the baristas.
This meant Starbucks needed to change its business model, and it had the necessary tools. Café hours were reduced and indoor dining was closed, but customers could use the app for grab-and-go orders. Of course, the baristas assume some level of risk by working, but these measures did reduce the amount of contact with other people.
This meant the community aspect of Starbucks was compromised. During the start of the pandemic, people understood the transition. But stores in 2022 aren’t anything like they were in 2019.
And it makes sense because the number of Starbucks employees has reduced dramatically since Starbucks had 349,000 employees in 2020, which includes the period pre-pandemic, and 138,000 in 2021, but coffee is still flowing.
The number of Starbucks stores has gone up, both worldwide and in the US, during this same period of time. This means employees are feeling the struggle more than anyone else.
More Coffee, Fewer Employees
Thanks to staffing shortages, Starbucks began reducing hours of operation. Maybe it was necessary, or maybe it fits into a long-term plan — but stores started closing earlier. After all, it’s a coffee shop, it doesn’t take a genius to realize that people will get their morning beverage in the morning.
Yet this is a stark contrast to Starbucks’ direction in the 90s and 00s. The brand wanted to be a “third place,” or a location between home and work where customers could sit down, meet friends, use the wifi, and maybe drink coffee. Starbucks placed such an emphasis on its customer experience that it earned a reputation for including circular tables so single customers would feel comfortable in the cafés alone.
Now, many locations have fewer tables, no music, and the chairs are less comfortable. Stores that once placed emphasis on community now place emphasis on transactions.
But this doesn’t just impact customers who need to schedule their coffee runs at different times; it also impacts the employees. When there are fewer employees, the ones behind the counter need to work harder and multitask more, ultimately causing longer wait times for the customer. This isn’t the employee’s fault, but they’ll bear the brunt of the frustrations.
Yet there’s also a scenario where this all makes sense. You know that barista at the front of the store taking orders? Starbucks would like to live in a world where that person isn’t needed. In 2021, then-CEO Kevin Johnson noted that the company would shift focus to the mobile-first, convenience-focused experience. If you’re looking for coffee recommendations or a place to sit and do work, Starbucks might not be for you.
Fewer Benefits, Fewer Employees
Regardless of prior initiatives, there is a world where a transaction-focused Starbucks can exist. Areas with heavy foot traffic probably don’t need a sit-down café, but a store by a college might need community space. The brand can cater its offerings to the area’s needs, but the employees are forced to adapt to the company’s changing landscape.
With the pandemic, health concerns, and fewer employees coming to work, the remaining staff is reevaluating their needs. Even though the number of workers has decreased, some employees are struggling to get hours. Rather, management will hire part-time baristas and avoid giving employees enough hours to get benefits.
Like any retailer, Starbucks needs people to do some work. Perhaps there are steps of the customer experience that could be replaced with software, but not all of it. If Starbucks is going to be successful with a reduced staff, it needs employees who know the stores, their customers, and operations.
This is why many stores are fighting to unionize. Employees are demanding livable wages, dependable hours, and benefits. And it’s not like Starbucks is hurting. Store count and profits are up, while the company-wide payroll has fewer people. Yet the employees who still show up are struggling to get hours and benefits.
Reliable employees are an asset in the retail world, yet they’re a rarity due to the lack of consistent hours and benefits. A progressive company like Starbucks seemed to attract employees who’d stick around. Without its benefits, it’ll lose these employees.
What Does This Mean For Retail
Even before the pandemic, 80% of Starbucks’ orders were to-go. This means the company already had tools in place when it needed to implement changes. It also meant a lot of people aren’t looking for a community space at the stores. They weren’t in 2019, and they aren’t today.
Starbucks was poised to be a model company in the post-pandemic world, even if as a transaction-focused store. But from the looks of it, the brand fumbled its opportunity. Instead, we’re seeing negative trends that will trickle into other retail climates.
Strategic Cuts
One way for businesses to spend less money: Pay employees less. Now that Starbucks has fewer employees, the company is starting to see they can save by having fewer people on payroll. For the customer, this might mean some hours are cut, especially super early morning hours or afternoon hours when there’s less traffic. It also means there might be longer wait times, but if customers don’t want to stand around, they can order in advance on the app.
But this has the potential to hinder employee loyalty, and we’re living in a time when people will leave if they’re unhappy. So, if Starbucks (or any company) doesn’t want to give employees full-time hours, those baristas will take their lattes somewhere else. It doesn’t matter how good your benefits are if employees aren’t getting enough hours to access them.
Customer Service Isn’t Everything
During the pandemic, Starbucks wasn’t much of a community. But people returned because they wanted their coffee and Frappuccinos. All of the smiles and handshakes you’d get in 2019 were compromised with masks and distance, but the product spoke for itself. People returned to the store when the community aspect was gone, so maybe it wasn’t as important as the brand thought it was.
To be clear, Starbucks does think there’s a space for dedicated community stores, but only where it makes sense. In most cases, the brand will build new stores with drive-thrus and an emphasis on mobile orders, because it’s more efficient to get people out as quickly as possible.
Other retailers have started taking notice, and they’re realizing it’s OK for a store to be transactional. Sometimes customers want to get in, self-checkout, and leave without saying a word. Why would they invest in building communities or hiring experts when many customers just want to make purchases as quickly as possible.
Workers Will Demand What They Deserve
Many stores are learning they can operate with fewer people, but can’t operate with zero people. Of course, workers can’t live without decent pay or access to benefits, so if retailers want to stay in business, they’ll need to pay the people who invest their time in building the brand.
This is why workers at major brands like Starbucks, Apple, and Trader Joe’s are unionizing. They’ll adapt to a changing retail landscape, but only if there are reasons for them to stick around. And long-term employees won’t survive with minimum wage and modest health benefits.
Is Starbucks Doomed
Of course, Starbucks will be just fine in the long run. They may need to pivot, and they’ll definitely need to address employee turnover as it relates to compensation. But this isn’t going to end its reign.
However, Starbucks hasn’t been a glowing example of success in a post-pandemic landscape. Customers are paying more, employees are getting less, and stores feel different. The brand entered the pandemic with all of the resources needed to shift toward a mobile-first landscape, but any positive momentum was squandered when employees left and the brand started offering less.
At many stores, Starbucks feels purely transactional, and while the customer finds this experience bland, that’s not always bad. The future of retail means fewer employees, but those who are working will need to do more. It may be impersonal, but the numbers don’t lie — it’s economical.
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