Maybe it’s all the caffeine.
The productivity of Starbucks staff has been surging over the last few years. According to a presentation it made to investors earlier this week, a key number by which the Seattle coffee giant measures productivity—”transactions per labor hour”—is set to end the current fiscal year at 11.7. “If you look back to 2008, you would have seen this [at] eight transactions per labor hour, and we base it on transactions,” said Starbucks executive Clifford Burrows at Morgan Stanley’s Global Consumer & Retail Conference earlier this week. That’s a roughly 46% increase since 2008.
Here’s the slide Starbucks used to make its point. (As an aside, you’ll notice it covers only the last three years and does that little trick with the y-axis to make the increase look a lot bigger than it is. If the graph had begun in 2008, it would be much clearer that productivity rose fast at first but has now flattened out. Well, hey, this is a sales tool.)
For a business like Starbucks, churning out fast transactions is the name of the game because so much business is done during key crunch times. (For instance, during the morning coffee rush. As we’ve written, Chipotle, the Mexican-food chain, has a similar challenge at lunchtime.)
Starbucks, however, is trying to get customers to come into its stores at other times too. That’s why, among other things, it spent $100 million to buy small San Francisco bay-area bakery La Boulange in 2012. “What La Boulange is providing us well beyond the morning pastries and the lunch is a significant platform to go after need states and day parts well into the future,” Starbucks CEO Howard Schultz, told investors on the company’s earnings call last quarter.
A platform to go after “need states” and “day parts”? It’s a bakery, and you’re hoping to pull people in for a snack when they’re hungry. Let’s not complicate things, Howard.