Business

Starbucks Tightens Rules for Café Use in North America to Increase Revenue

Starbucks tightens the rules for using its branches to compensate for declining revenues and to win back paying customers.

Eulerpool News Jan 28, 2025, 6:12 AM

Starbucks tightens its policies for the use of its stores in North America to combat declining sales. Starting Monday, only paying customers are allowed to stay in the world's largest coffee chain's roughly 11,000 stores. Free water dispensing will be discontinued, while free coffee refills will in the future be offered only to customers with mugs or glasses.

The step comes against the backdrop of a 5 percent decline in transactions in 2024 - the first negative development since the pandemic. Analysts expect a revenue decline of 4.8 percent on a comparable basis for the first quarter.

Starbucks CEO Brian Niccol aims to position the company as a "community-oriented coffeehouse" with his restructuring program "Back to Starbucks." This involves not only a return to the company's roots but also bringing paying customers back to the stores.

In recent weeks, Starbucks employees were trained to enforce a new code of conduct stating that the stores are exclusively for "partners and customers (people making purchases or their companions)." Individuals not making purchases may be asked to leave the café.

The decision meets with resistance. Donald Whitehead, Executive Director of the National Coalition for the Homeless, sharply criticized the new guidelines. Until now, Starbucks has played an important role as a refuge for the homeless, especially in the early morning hours before public facilities open.

The union Workers United, which represents baristas in over 500 branches, is also demanding that the enforcement of the new rules be part of the collective bargaining negotiations. Employees expressed concerns about the practical implementation, especially during cold winter months.

Starbucks defends the measure as standard in the industry and emphasizes that guests without purchase intentions are not immediately asked to leave in empty stores. However, at busy locations, a purchase may be required to make room for paying customers.

Parallel to the new guidelines, Starbucks is increasingly investing in creating a sensory experience for customers. The return of "condiment bars" with options for milk and sweeteners, as well as a revised store design, are part of the strategy.

In 2018, Starbucks began opening its stores to non-customers as well, after an incident in Philadelphia involving the arrest of two Black men caused public outrage. However, the return to traditional customer focus could create new challenges.

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