Starbucks Drops Non-Dairy Upcharge, Halts Price Hikes, Targets Faster Service Under New CEO

Oct 30, 2024, 09:38 PM

Starbucks announced a series of operational changes aimed at enhancing customer experience and reversing declining traffic across all day parts in the fourth quarter. Starting November 7 in the U.S. and Canada, the company will eliminate the extra charge for non-dairy milks, such as soy, oat, almond, and coconut milk—a move that could represent a 10% price cut for customers who prefer non-dairy options. CEO Brian Niccol outlined plans to bring back condiment bars in all cafes by early 2025, reintroduce comfortable seating and ceramic mugs, and implement a four-minute service time goal for customer orders, stating, "I'm putting a full-court press on four minutes." Starbucks will also adjust its labor model, simplify its menu, and reduce the frequency of discounts. Recognizing that modifiers are a $1 billion business in the U.S., Niccol acknowledged that eliminating the non-dairy upcharge may impact revenue. Additionally, the company intends to slow the growth of new stores and renovations in fiscal year 2025, focus marketing efforts beyond just Starbucks Rewards members, and explore strategic partnerships to reverse the sales slump in China. Starbucks has pledged not to raise menu prices at company-owned and operated stores in North America through fiscal 2025.