Starbucks Announces New Incentive Scheme for Baristas to Boost Employee Morale and Sales
On Thursday, Starbucks (SBUX) unveiled a new incentive programme aimed at motivating its baristas. This initiative allows baristas and shift supervisors to earn an annual bonus of up to $1,200, equivalent to $300 per quarter, by meeting specific sales, operational, and customer service goals that are designed to enhance the company’s growth. The programme is set to commence in July, with the first payouts anticipated in the fall.
In conjunction with this incentive, Starbucks is broadening the options for tipping, allowing customers to tip employees via credit or debit cards when placing orders through the mobile app or at the register.
According to the Chief Operating Officer (COO) Mike Grams and Chief Partner Officer Sara Kelly, these measures could result in an increase in employee compensation of approximately 5% to 8% beyond their standard hourly wages. Another significant change includes moving employee pay schedules to a weekly basis for US workers.
However, it’s important to note that only 5% of Starbucks locations in the US are unionised and these stores will not immediately benefit from the new incentive scheme. As stated in the memo by Grams and Kelly, “The new programme at the approximately 5% of U.S. locations where partners have a union will be subject to collective bargaining as mandated by federal law.”
The announcement arrives as CEO Brian Niccol endeavours to rejuvenate the 55-year-old coffee chain amid recent years of disappointing results. During the fiscal first quarter, Starbucks reported its first rise in same-store sales within North America and the US in two years.
Specifically, same-store sales in these regions saw a 4% increase, surpassing Wall Street’s projections of a 2% rise as per Bloomberg data. The growth was attributed to a 3% rise in comparable transactions along with a 1% boost in average ticket size.
Investor confidence appears to be restoring, with Niccol asserting, “It is clear from our top line results that our back to Starbucks plan is working, and our turnaround is taking hold.”
As of now, Starbucks shares have experienced a nearly 8% increase for the year.
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Brooke DiPalma is a senior reporter for Yahoo Finance. You can follow her on X at @BrookeDiPalma or reach out via email at bdipalma@yahoofinance.com.
