Inside Starbucks' plans to improve stores for customers and baristas

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watch now Starbucks cafes across the country are starting to change how they make drink orders, among other tweaks designed to reduce bottlenecks and long wait times that have dogged the chain. The overhaul comes as the coffee giant prepares for an anticipated swell of orders through its mobile app. At the heart of the plan is Starbucks' "Siren Craft System," a series of processes that are aimed at making baristas' jobs easier and speeding up service times for customers. Starbucks said more than 10% of its 10,000 stores have already implemented the system, which includes changing the production order for hot and cold drinks. It will be in use across North America by the end of July, according to the company. Executives hope the changes will provide a much-needed jolt to Starbucks. In April, the company reported a disappointing second quarter, as U.S. same-store sales fell 3% and traffic dropped 7%. The coffee chain cut its 2024 outlook. Starbucks reported rates of incomplete mobile app orders in the mid-teens and said occasional customers came in less. CEO Laxman Narasimhan mentioned the need to make improvements to stores. Katie Young, senior vice president of store operations at Starbucks, said the most immediate shift that needed to happen in cafes was better handling the unexpected. "It's the ability to flexibly respond to things we cannot predict," she told CNBC in an interview. Starbucks Coffee shop in Krakow, Poland on February 29, 2024. Beata Zawrzel | Nurphoto | Getty Images The store changes will be key this month, as Starbucks on Monday started opening up its app to non-rewards members, which the company believes will increase traffic and orders. Analyst Peter Saleh, managing director at BTIG, said, "My sense is that they have a lot of demand in certain stores, and the footprint of the kitchen is so small, you have to find ways to be more efficient." Losing customers because of slow orders and other store frustrations could cost Starbucks at a particularly vulnerable time. Americans have become cost conscious in the face of ongoing inflation, and in some cases have pulled back on morning or afternoon beverages and snacks. Narasimhan in April said consumers are spending more cautiously. Starbucks has done something uncharacteristic in recent weeks, joining the stream of value offerings with a $5 food and beverage combo option. Communicating value to customers is also part of the plan to drum up business. The Siren system Starbucks has been diagnosing the bottleneck issue for more than a year, since the company's reinvention plan rollout in 2022, said Young. At the time, Howard Schultz was at the helm, having returned during a burgeoning unionization movement and shifts in consumer preferences. The changes underway in cafes were first previewed that fall, to be rolled out in the years to come. Narasimhan took over for Schultz in March 2023. The Siren system processes were developed with worker feedback on which issues stopped them from creating beverages and connecting with customers. Starbucks said it plans to add a role akin to an expediter in a restaurant production line, a "play caller" who steps away from production and helps solve logjams in cafes, handling tasks such as restocking cups or helping when an unexpected crowd arrives. The company plans to train existing workers for the role or potentially add new baristas, if needed. "One of the pain points we saw was [that] our espresso machine was often running all the time, and that was one of the things that kept our partners from being able to check in. And another thing we saw that you didn't necessarily know was which part of the store would get crowded," Young said. "We needed to actually have a partner that was dedicated when things got busy to pulling out of production and just helping." Starbucks said it will also change the order in which beverages are made. Previously, cold drinks were prioritized from start to finish, even if a hot beverage order came in first, as pulling espresso shots was the last step. This could create a traffic jam in the drive-thru, for example, if a person ordered one of each beverage, as the cold item would be ready while the hot drink was still in production. Macoy McLaughlin, manager of Seattle's First and Walker Starbucks location, said producing beverages in the order they were placed allows for a faster, streamlined process. "We actually have proper sequencing between our hot and cold bars, versus cold bars becoming as popular as ever, to really have a consistent experience for the customers. So we're actually making them in the order they're coming in," McLaughlin said, adding that the cafe feels busier, but customers in store and in the drive-thru are getting drinks faster. Baristas also will have more control over the company's digital production manager, an iPad system that controls the sequencing of orders in various channels from cafes, mobile orders and the drive-thru, the company said. Workers will have more flexibility over changing order priority. Starbucks app expands