Starbucks accepts automation idea failed, CEO Brian Niccol says, 'That wasn't an accurate ...'
Starbucks
is shifting its strategy by investing in more baristas rather than automated systems after discovering that cutting staff in favor of equipment has damaged customer experience, CEO
announced at Q2 2025 earnings call.
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"Over the last couple of years, we've been removing labor from the stores, I think with the hope that equipment could offset the removal of the labor," Niccol said. "That wasn't an accurate assumption with what played out."
The coffee giant's new approach, called the
Green Apron Service model
, will launch next month with plans to implement it in about a third of US locations by the end of fiscal year 2025. The model will include a new algorithm to optimize drink preparation sequence and reduce wait times.
Starbucks CEO says that company's automated coffee making system will be deployed only in some locations
Niccol, who became CEO in September, is slowing the rollout of the company's Siren system—automation technology introduced in 2022 designed to streamline drink-making. Instead, he plans to deploy the technology only in "very targeted" high-volume locations.
The company has already tested increased staffing in 700 stores, with plans to expand to between 1,500 and 2,000 US locations by May and around 3,000 by year's end.
Niccol acknowledged the additional labor will increase costs but expressed confidence that improved customer experience will drive growth.
"The equipment doesn't solve the customer experience that we need to provide," Niccol said, emphasizing his focus on improving hospitality through "small details" like handwritten notes on cups and using ceramic mugs for in-store customers.
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While China is Starbucks' second-largest market after the US, the coffee market is highly competitive and consumers have become more cautious about spending because of the slowing economy and concerns about job security read more Starbucks China will lower the prices of some of its iced drinks by an average of 5 yuan ($0.70) across the country, the company announced on Monday, as competition intensifies and consumers become more cautious about spending. In a post on its Weixin social media account, the US coffee chain said it would offer more 'accessible' prices on dozens of its drinks, including non-coffee drinks and the Frappuccino, from Tuesday. While China is Starbucks' second-largest market after the US, the coffee market is highly competitive and consumers have become more cautious about spending because of the slowing economy and concerns about job security. STORY CONTINUES BELOW THIS AD The new approach means some of Starbucks' drinks will be priced as low as 23 yuan, the post said. Domestic rivals such as Luckin Coffee and Cotti have priced their drinks as low as 9.9 or even 8.8 yuan, while deep-pocketed internet companies and Alibaba Group have entered the food delivery market, adding to the competition. With offers and vouchers, Chinese coffee consumers can buy themselves a drink for as little as 2.9 yuan. A person close to Starbucks, said the company was not reducing prices in response to intense price competition, but looking to attract more customers in the afternoon. The individual requested anonymity as they were not in a role that allowed them to comment to the media. 'Starbucks likely has a longer-term strategy, which is to focus on the demand for non-coffee items in the afternoon among consumers,' the source said. Starbucks had said previously that it would not engage in a price war. However, it has also introduced smaller-sized drinks and issued coupons which have lowered prices for customers. The US giant has also been looking to revive its business in China via selling stakes in the business.
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