Latest news with #WaylonCunningham
Yahoo
4 days ago
- Business
- Yahoo
Starbucks accelerates new staffing model to all North American stores
By Waylon Cunningham (Reuters) -Starbucks CEO Brian Niccol told Reuters on Tuesday that he would accelerate the rollout of the coffeehouse chain's new staffing and service model, aiming for all 18,000 North American stores by summer's end, rather than the initial plan for just a third of U.S. stores by year-end. Niccol says the model is a foundational element of his turnaround strategy for the company, as he bets on an improved in-store customer experience to reclaim the sales growth that has eluded Starbucks in recent quarters. Niccol said early tests of the model have sped up service times and grown sales, without providing specifics. 'We've learned, and now we know what we need to do, so let's scale it,' he told Reuters at the company's three-day leadership summit in Las Vegas on Tuesday. The Green Apron model includes in-store technology to more efficiently sequence orders, as well as a dedicated barista for drive-through orders. Starbucks rolled out the service changes to 700 stores initially. During the company's April 29 quarterly earnings call, Niccol said it would be introduced in a third of U.S. stores by year-end. Niccol took over as Starbucks CEO in September with a plan to return the chain to its coffeehouse roots, focusing on the in-store experience and away from a reliance on mobile and to-go orders, in what the company calls "Back to Starbucks.' The goal is to get baristas to get customers their orders in four minutes or less. He did not share any financial figures about the cost of the Green Apron model's deployment, but said the company would host an investor day in 2026. The Las Vegas summit, the company's first since 2019, is hosting more than 14,000 managers and other company leaders. Analysts and investors have wondered how long Niccol will need to turn the company around. Shares have gained 11% over the last five years, compared with an 88% rise in the broad-market S&P 500. TD Cowen recently downgraded its rating of Starbucks to "hold" from "buy", saying in part that it believed Niccol's turnaround would take longer than expected to deliver results. Niccol said the transition will take time. Starbucks has not issued annual guidance, and Niccol told investors in an earnings call earlier this year that earnings-per-share 'shouldn't be used as a measure of our success' at this stage, instead pointing to in-store metrics like average wait times for orders. He said the transition's effect on earnings would be temporary. On Tuesday, he emphasized his goal isn't to achieve short-term performance solely through cost reduction. As Starbucks increases investments in its labor and elsewhere, Niccol said he would be "ruthless" in cutting expenses not related to the company's turnaround. 'We have to be critical of where we're spending if it's not driving toward the Back to Starbucks strategy and growth programs.'
Yahoo
23-05-2025
- Business
- Yahoo
McDonald's to close standalone beverage concept
By Waylon Cunningham (Reuters) -McDonald's Corp is shutting down the five beverage-centered CosMc's stores it opened in 2023, but said some drinks from the standalone concept would be tested in McDonald's restaurants. The company said on Friday it had opened the stores as a test to learn more about the 'fast-growing beverage space,' which it said it had a 'right to win.' It said the standalone stores – in markets including San Antonio, Texas – allowed it to test new flavor and technologies without impacting existing McDonald's restaurants. The company said it will test 'CosMc's-inspired' drinks to its main menu at hundreds of U.S. stores. The company has more than 14,000 locations in the U.S. In March, McDonald's announced it would be establishing a new internal team to develop new beverages. The company said all CosMc's would be closed on a rolling basis beginning in late June. The CosMc's app will also be discontinued. Restaurant consultant John Gordon said McDonald's has historically been 'very quiet' in the beverage space compared with other restaurant chains, which have experimented with complicated drinks that typically carry a higher profit margin than food items. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
30-04-2025
- Business
- Yahoo
Starbucks to beef up store staffing, go slow on automation rollout
By Waylon Cunningham (Reuters) -Starbucks will invest more in staffing and less on equipment, including an automation system that it previously touted, CEO Brian Niccol said on Tuesday, breaking with a wider industry trend to rely more on technology for store operations. Niccol said additional staffing was critical to improving the customer experience – his main objective since assuming leadership in September. "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 in an investor call. "What we're finding is that wasn't an accurate assumption with what played out." On Tuesday, Starbucks reported North American same-store sales fell 1% for the fiscal second quarter ended March 30, worse than the 0.24% drop estimated by analysts in an LSEG poll. The company said sales in Canada returned to growth in the quarter. Margins at Starbucks have shrunk for five straight quarters, falling 590 basis points in the second quarter reported on Tuesday. Starbucks increased its staffing levels at five stores as a pilot since Niccol took the helm. By May, between 1,500 and 2,000 U.S. stores will have increased headcount, with around 3,000 by the end of the year. The increased labor will add to costs, Niccol said. "We're banking on some growth to come with the investment in the labor and the store experience." Starbucks will pull back from a deployment of its Siren system, a suite of tech and equipment rolled out in 2022 intended to streamline drink-making. As recently as October, the company had slated the system for a widespread roll-out, according to executives on its earnings call. Then by January, executives said it would only be deployed to the top-quartile of stores by sales volume. On Tuesday, Niccol said the Siren system would only be installed in 'very targeted' stores, such as those with high drive-through customer volumes and overall sales. The move cuts against the trend of other large restaurant companies, which have announced significant new investments in technology. For example, Chipotle's CEO, who succeeded Niccol when he left the fast food chain, said in February the company would continue efforts at kitchen automation with an eye toward possibly cutting labor costs. Sign in to access your portfolio
Yahoo
12-02-2025
- Business
- Yahoo
Burger King parent beats fourth-quarter estimates on strong demand
By Juveria Tabassum and Waylon Cunningham (Reuters) -Restaurant Brands beat fourth-quarter profit and sales estimates on Wednesday, as promotions boosted performance at Burger King while Tim Hortons benefited from steady demand for its Double Double and Iced Capp coffee. Burger King's attractive offers on its popular Whopper burgers and value meals helped it report a rise in U.S. comparable sales for the quarter. Fast food giant McDonald's, which also offered value deals to attract price-conscious customers, however, reported its biggest comparable sales decline in the U.S. earlier this week, citing an E. coli outbreak in late October. Burger King and Wendy's saw some share gain during the period as a result, said Jim Sanderson, analyst at Northcoast Research. U.S. comparable sales at Burger King grew 1.5% in the quarter, compared with a 0.4% fall in the prior quarter, while McDonald's U.S. same-store sales fell 1.4%. Burger King balanced its promotions "prudently with incentives to increase spend per visit for consumers," which drove comparable sales growth in the quarter, said Danilo Gargiulo, analyst at Bernstein. Restaurant Brands' Tim Hortons chain, which accounts for a little less than half of the company's total revenue, has benefited from steady demand for its coffee with quarterly revenue growing about 1%. Though coffee prices are at record highs, and eggs are pricier due to a bird flu outbreak, these commodity costs are unlikely to cause "very high inflation" for the company, CEO Joshua Kobza told Reuters. Restaurant Brands' fourth-quarter revenue of $2.30 billion beat analysts' average estimate of $2.28 billion, according to data compiled by LSEG. Its quarterly adjusted profit per share of 81 cents also topped expectations. Shares of the company were flat in morning trading. They had risen about 4% premarket after the results. Sign in to access your portfolio
Yahoo
06-02-2025
- Business
- Yahoo
Bird flu spurs diner chain Waffle House to add 50-cent fee per egg
By Waylon Cunningham (Reuters) - U.S. diner chain Waffle House has added a 50-cent surcharge for every egg in a customer's order, the company said in a statement posted in its restaurants on Monday. The fee is temporary, the company said in a statement Tuesday, and is a response to a 'dramatic increase in egg prices' caused by bird flu outbreaks. "While we hope these price fluctuations will be short-lived we cannot predict how long this shortage will last,' the statement read. The privately-held chain is known for its low prices. A standard American breakfast with two eggs is sold for $7.75 in Norcross, Georgia, where the company is headquartered. That meal is now $1 more expensive. The price of U.S. wholesale eggs hit an all-time high in December, according to commodity data firm Expana, with a dozen eggs going for $5.57 in the Midwest and $8.85 in California. The main factor driving egg prices higher is damage to the laying flock from bird flu. The virus wiped out more than 20 million chickens in the U.S. last quarter, data from the U.S. Department of Agriculture shows, the highest toll since the beginning of the outbreak in 2022. The chain said it has 2,100 locations across the United States. Its website says it serves 272 million eggs every year. Sign in to access your portfolio
