In This Story
Starbucks (SBUX+0.12%) is making big changes in the name of safety.
In lieu of its 2018-era goal to become the “third place” where people hang out, Starbucks has a new “Coffeehouse Code of Conduct.” This policy limits access to stores, allowing only paying customers to sit inside or use the restroom, Starbucks said.
CEO Brian Niccol told Yahoo Finance (VZ-2.17%) that this decision was driven by “consistent feedback” from both customers and employees, who expressed concerns about store safety and the need for clearer expectations.
Starbucks’ 2018 open-door policy came after a Philadelphia location had two Black men arrested for trespassing; they’d used the bathroom and were waiting for another person to arrive before ordering. After the arrests made headlines, former CEO Howard Schultz introduced the policy and said, “We don’t want anyone at Starbucks to feel as if we are not giving access to you to the bathroom because you are less than.”
Under new CEO Niccol, who previously ran Chipotle (CMG+0.58%), the rules are changing. “In order to be the coffeehouse that we want to be, we need to bring some practical pieces of our Code of Conduct,” the CEO said. He added that the company may add “additional security” in its stores; Starbucks did not immediately reply when asked by Quartz if this means increased spending on security tech, guards, or both. Additionally, Niccol said Starbucks will close some stores as a last resort.
“We’re going to work with our [employees] to make sure they’re supported and protected,” said Niccol. “And look, if it gets to the point that it doesn’t make any sense, we’ll close the store,” he added.
Starbucks will also lay off some workers in the coming months, although the company has not yet revealed an exact number. Niccol stated that more details will come within the next 60 days. Starbucks did not immediately respond to Quartz when asked for more information on the affected roles. Per Starbucks, the restructuring is intended to improve accountability and streamline operations. In Oct. 2024, Starbucks told corporate employees to return to the office three days a week or quit. These moves fall under Niccol’s “Back to Basics” turnaround plan. Additionally, Niccol recently hired two former Taco Bell executives to help with store operations and customer experience.
The changes don’t stop there. Starbucks is also trimming its menu by 30% to focus on its most popular items. “We have to clear the noise out,” Niccol said, referring to items that don’t sell regularly and take up space. During the company’s Jan. 28 earnings call, Niccol hinted that the company may test new breakfast and lunch offerings. Altogether, Starbucks has announced plans to pare down its menu, remove the up-charge for non-dairy milk alternatives, make coffee in under four minutes, introduce digital menu boards in U.S.-owned stores, and get back into regular TV ads. It’s also tripled parental leave for its U.S. baristas.
Despite exceeding fiscal first-quarter estimates, Starbucks recorded a decline in same-store sales for the fourth consecutive quarter. Niccol described the company as being in the midst of a turnaround, and aiming to reinvigorate the brand, support employees, and return to growth. Notably, it also means the return of ceramic mugs for customers opting to sit down and enjoy their beverage, which Niccol is calling the “mug hug.”