Starbucks CEO Brian Niccol briefed investors on the progress of the coffee giant’s turnaround program at its shareholder meeting Wednesday. He touted a host of changes, most of which had already been publicly disclosed, intended to revive the brand’s coffeehouse image.
But Niccol cautioned the chain is still “in the early days of our turnaround, and [has] much more to do to return the business to growth.”
The company’s medium-term future includes more changes to its in-store experience, he said.
“Imagine coffeehouses that are comfortable and warm with expanded seating options, power outlets and abundant food displays, stores with more separation between the cafe and mobile order experience, featuring new risers and dedicated pickup shelves in select locations to create an intuitive hand-off, and cafes anchored by a redesigned espresso bar that adds a sense of theater,” Niccol said.
Some U.S. stores have already begun testing these features, and the technology to enable them, like a mobile-ordering sequence algorithm.
“The early progress we’ve seen wouldn’t be possible without our Green Apron partners,” Niccol said.
Niccol said the chain has added several benefits, doubled parental leave and increased hours at 3,000 cafes to ensure that it was the best employer in the retail and restaurant sector. The chain is also trying to promote its managers from within.
Jasmine Leli, a Starbucks Workers United member who works at one of the first Starbucks to unionize in Buffalo, New York, told Restaurant Dive that workers issues were intertwined with efforts to revive the brand, and that aesthetic changes in the coffee shop wouldn’t solve operational issues. At her store, Leli said, there are rarely enough workers for the afternoon daypart.
“[Customers] want to be able to get in and get out when they come to pick up their orders, or they come in to place an order. And that's not always possible when you're working with a skeleton crew,” Leli said.
Niccol said Starbucks has invested considerably in its workers since he joined. But one employee has been a disproportionate recipient of that investment. According to a disclosure in the brand’s proxy statement, Niccol’s total compensation, comprised largely of bonuses and stock awards, was $97.8 million in 2024. Comparatively, the median worker, a part-time barista in the U.S. made $14,674 in 2024, per the proxy statement, meaning Niccol received 6,666 times the compensation of a representative worker.
According to the U.S. Department of Health and Human Services, the individual poverty line in the U.S. is $15,650. At least 50% of Starbucks workers earn less than this in total compensation per year, per the proxy statement. The median Starbucks worker earned almost exactly half of what the median waiter, fast food cook or foodservice and prep worker earned in 2023, according to the Bureau of Labor Statistics — but the bureau’s wage calculations only include full-time workers.
“We're watching the CEO make all of this money, and we got less money in raises and they're laying people off. We want our contract to be finalized and we want Starbucks to invest money in the union workers,” Leli said.
Starbucks Workers United responds to shareholder meeting with increased pressure
Accompanying the shareholder meetinf, Starbucks Workers United staged actions, including strikes, in several cities. At least 16 people were detained during sit-ins organized by SBWU, according to a press release emailed to Restaurant Dive.
SBWU members felt let down by the company’s failure to reach a contract with the union, despite its previous statements indicating it wanted to do so by the end of 2024.
Sara Kelly, the brand’s chief partner officer, said Starbucks and the union have engaged a mediator to resolve issues in bargaining for a foundational framework.
Getting to that contract, Leli said, will require a mix of continued workplace organizing, consumer action and pressure on shareholders to persuade the company to invest more in its hourly workers.
Some of the changes made have had unintended consequences, Leli said. Niccol described the elimination of some drinks, as a way to free up Starbucks to pursue culturally driven LTOs and to add new, innovative drinks like the Cortado.
But this hasn’t kept customers from ordering those drinks through laborious customizations in-store, Leli said. A frappuccino with several modifications to resemble a discontinued drink build takes longer to ring up than the old menu item would’ve.
And that hasn’t solved the problem of consumers seeking out social media-driven drink trends.
“Now people come in and they're like, ‘Do you have this TikTok drink?’” Leli said. “They’re reading off a list — you should see some of the lists that we get — it's like reading a recipe.”
Clarification: This story was updated to provide more context on Bureau of Labor Statistics wage calculation data and the nature of Starbucks’ shareholder meeting.
