Here’s Why “Winning Its Employees” Is Crucial For Starbucks’ Growth

by Trefis Team
Rate   |   votes   |   Share

Starbucks (NYSE:SBUX) is facing the problem of plenty. When the company pioneered the mobile order and pay system, it was looking to create a convenient platform for customers and reduce waiting times significantly. However, as an overwhelming number of customers started using this system, the company’s restaurants were not equipped to handle this volume, creating congestion at the hand-off planes (Read Here’s How The Success Of Mobile Order And Pay Is Negatively Impacting Starbucks). This resulted in a slow-down in the growth of its comparable sales and the company is now working on several initiatives including a long term plan of store redesign to resolve this issue. Training its employees to handle this volume of orders and improve customer service is critical for Starbucks. In order to achieve this goal, the company has launched a two-year agenda termed “North Star” which aims to refocus the company’s approach to customer service.  While this program appears to be aimed at training baristas towards better customer service at a time when the company struggles with the congestion issue, reports suggest that its employees are concerned with the approach followed by the company. However, Starbucks is an employee focused organization, which is one of its key assets, and this strength would be crucial for the company to meet its mobile order and pay challenges.

Starbucks’ Low Employee Turnover A Strong Asset

As Starbucks braces itself to meet the volumes generated by the success of its mobile order and pay system, efficient restaurant operations will be the key driving factor to growth traffic. Trained and motivated employees would be an important factor to run restaurant operations smoothly and improve customer service. Restaurant stocks have gained significantly by having policies in place which reward employees correctly. Starbucks has the lowest employee turnover among quick service restaurants and its strong employee engagement strategies have ensured that its staff is motivated. The company is constantly looking at new perks to offer to its employees and is extremely focused on employee training. The company has an elaborate online portal which offers an instruction program imparting the necessary knowledge for the job.

As the company looks to accelerate comparable sales growth, these initiatives will be crucial to train employees to handle the challenges caused by the new technology. Recently, Chipotle Mexican Grill admitted that its customer service was impacted due to “distracted employees” and the company revamped and simplified its reward program to improve employee motivation. This initiative has started showing results as the company shows signs of recovery. As Starbucks looks to resolve its volume challenges, motivated employees trained for better customer service would be one of its greatest assets. The company already has strong employee retention and motivation strategies and we believe that its North Star initiative should ensure that the challenges faced due to the mobile order and pay system are addressed, improving restaurant operations and driving comparable sales.

 View Interactive Institutional Research (Powered by Trefis):

Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap | More Trefis Research

Like our charts? Embed them in your own posts using the Trefis WordPress Plugin.

Rate   |   votes   |   Share


Name (Required)
Email (Required, but never displayed)
Be the first to comment!