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Starbucks ( SBUX ) will deploy an increased labor model to all

North

American stores by the end of the summer, CEO tells Reuters

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Pilot tests of new staffing model saw increased sales, CEO

says

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Starbucks ( SBUX ) to focus investments on 'Back to Starbucks' ( SBUX )

turnaround, cut costs elsewhere

By Waylon Cunningham

June 10 (Reuters) - Starbucks ( SBUX ) CEO Brian Niccol

told Reuters on Tuesday that he would accelerate the rollout of

the coffeehouse chain's new staffing and service model, aiming

for all 18,000 North American stores by summer's end, rather

than the initial plan for just a third of U.S. stores by

year-end.

Niccol says the model is a foundational element of his

turnaround strategy for the company, as he bets on an improved

in-store customer experience to reclaim the sales growth that

has eluded Starbucks ( SBUX ) in recent quarters.

Niccol said early tests of the model have sped up service times

and grown sales, without providing specifics. "We've learned,

and now we know what we need to do, so let's scale it," he told

Reuters at the company's three-day leadership summit in Las

Vegas on Tuesday.

The Green Apron model includes in-store technology to more

efficiently sequence orders, as well as a dedicated barista for

drive-through orders. Starbucks ( SBUX ) rolled out the service changes

to 700 stores initially. During the company's April 29 quarterly

earnings call, Niccol said it would be introduced in a third of

U.S. stores by year-end.

Niccol took over as Starbucks ( SBUX ) CEO in September with a plan to

return the chain to its coffeehouse roots, focusing on the

in-store experience and away from a reliance on mobile and to-go

orders, in what the company calls "Back to Starbucks ( SBUX )." The goal

is to get baristas to get customers their orders in four minutes

or less.

He did not share any financial figures about the cost of the

Green Apron model's deployment, but said the company would host

an investor day in 2026. The Las Vegas summit, the company's

first since 2019, is hosting more than 14,000 managers and other

company leaders.

Analysts and investors have wondered how long Niccol will need

to turn the company around. Shares have gained 11% over the last

five years, compared with an 88% rise in the broad-market S&P

500. TD Cowen recently downgraded its rating of Starbucks ( SBUX ) to

"hold" from "buy", saying in part that it believed Niccol's

turnaround would take longer than expected to deliver results.

Niccol said the transition will take time. Starbucks ( SBUX ) has

not issued annual guidance, and Niccol told investors in an

earnings call earlier this year that earnings-per-share

"shouldn't be used as a measure of our success" at this stage,

instead pointing to in-store metrics like average wait times for

orders. He said the transition's effect on earnings would

be temporary.

On Tuesday, he emphasized his goal isn't to achieve

short-term performance solely through cost reduction. As

Starbucks ( SBUX ) increases investments in its labor and elsewhere,

Niccol said he would be "ruthless" in cutting expenses not

related to the company's turnaround. "We have to be critical of

where we're spending if it's not driving toward the Back to

Starbucks ( SBUX ) strategy and growth programs."