Staffing

Starbucks investing $1B in employees, customer experience

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May 3, 2022

StarbucksCorporation is investing $1 billion to increase pay for workers, modernize training and collaboration and elevate the customer experience.

"The transformation will accelerate already record demand in our stores. But the investments will enable us to handle the increased demand, and deliver increased profitability, while also delivering an elevated experience to our customers and reducing strain on our partners, CEO Howard Schultz said in a company press release. "And we will reintroduce joy and connection back into the partner experience."

Since his return as CEO on April 4, Schultz and other Starbucks executives have been visiting retail and roasting plant partners around the country to hear how their work and lives have been impacted over the last two years. After hearing these stories, Schultz announced the following investments:

• The return of the Coffee Master and Black Apron programs.
  Eligible partners who complete the Coffee Master program will have the chance to be selected for the Leadership in Origin program at Hacienda Alsacia, Starbucks coffee farm in Costa Rica.
• The launch of an employee app in August to create one digital community for all 240,000 U.S. employers, extending collaboration sessions to support partners, plants, retail leaders and to every store with dedicated connection time over the next month.
• Additional and more effective training, including doubling the amount of training time for new baristas beginning June 21, doubling the amount of training time for new shift supervisors beginning August 30, and more training for baristas and supervisors already in role. Enhancements also include a redesigned "First Sip" barista training program, a newly designed shift supervisor program and more hands-on practice time for baristas.
• Increased pay and support with financial stability. As previously announced, Starbucks is moving all U.S. store partners to a $15/hour floor this summer, effective Aug. 1, and is adding incremental increases that will apply to all U.S. store partners, while recognizing and rewarding tenure. On Aug. 1, average hourly pay at Starbucks will be nearly $17/hour nationally. All partners hired on or before May 2 will get either a 3% raise or $15/hour, whichever is higher.
• Partners with two to five years of service will receive at least a 5% increase or move to 5% above the market start rate, whichever is higher. Partners with over five years of service will receive at least a 7% increase or move to 10% above the market start rate, whichever is higher.
• Double planned investments in store manager, assistant store manager and shift manager pay for leaders hired on or before May 2.

Starbucks reported Tuesday that its U.S. same-store sales were up 12%, which beat Wall Street expectations of nearly 9%, but revenue and earnings per share came in just a bit below expectations. Revenue was $7.6 billion versus the $7.62 billion expected, and adjusted earnings per share was 59 cents compared to 60 cents. The news wasn't as good for international same-store sales, however, which ended -8 % versus the 1.87% that was expected.