| US

Starbucks to invest $450m in US stores upgrade

The Seattle-based coffee giant has vowed to upgrade its 15,650 coffee shops, with new barista technology to streamline cold beverage preparation time and automated ordering in the pipeline for next year

Starbucks will invest $450m to modernise its stores with new equipment that will simplify operations | Photo credit: Starbucks


 

Starbucks Interim CEO Howard Schultz has shared further details of the coffee giant’s reinvention strategy, informing investors that the company will improve efficiency to keep pace with increasing consumer desire for convenience.  
 

Starbucks will invest $450m to modernise its stores with new equipment that will simplify operations and speed up service. 


With cold coffee beverages now accounting for 60% of orders each year, Starbucks said it will explore the use of technology to ensure that cold brew coffee is less labour intensive and more consistent across its 15,650 outlets. The coffee chain’s new Cold Pressed Cold Brew system has been trialed in-store this year and a second test is scheduled for January 2023. 


Traditional hot coffee beverages will also benefit from new machines next year. The company said that new Clover Vertica machines will be installed, which grind and brew a single cup of coffee in 30 seconds. Starbucks said this removes the need for baristas to batch brew coffee every half hour. 


As US consumers continue to utilise drive-thru stores and app ordering Starbucks said it will expand automated ordering across more US stores in the next few years. A quarter of Starbucks transactions now come from mobile app orders, while drive-thru now comprises 50% of US sales for the company.  


The Seattle-based coffee chain said that demand for delivery has increased by 24% so far this year. The company is growing its Starbucks Delivers programme in the US with a new partnership with DoorDash, which will expand nationally alongside an existing UberEats agreement in 2023. 


“As we execute on our Reinvention plan, we are building on our 51-year history of market leading innovation to position our business and our brand for the next chapter of growth. Guided directly by our partners, we have already begun to take action on an inspired roadmap to build the future of Starbucks, all while staying true to our mission of uplifting communities through a shared love for coffee and further extending our coffee leadership and innovation,” said Schultz. 


The Seattle-based company announced as part of its 2022 Investor Day that it expects 10-12% net revenue growth over the next three years and is targeting 2,000 new store openings in the US by 2025. 


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