The world’s biggest coffee chain has a new code of conduct effective Monday (Jan. 27) requiring people to buy something in order to use any of its facilitates, including tables, seating, or restrooms.
The new rule at Starbucks reverses a 2018 practice allowing anyone to come in and linger regardless of whether they bought a latte. The customers-only policy was launched under new CEO Brian Niccol, who took the helm on Sept. 9, 2024.
Niccol’s new plan focuses on coffee, pricing, and service. Milk and sugar stations are coming back, as are handwritten-names on cups.
Founded in Seattle, Washington in 1971, Starbucks has more than 39,000 locations around the globe and is expected to post its first quarter fiscal year 2025 results on Tuesday (Jan. 28) after market close. This will be the first full quarter under CEO Brian Niccol, who took the helm on Sept. 9, 2024.
Wall Street forecasts revenue to come in at $9.32 billion, compared to $9.43 billion from the same quarter last year. Same-store sales and foot traffic are projected to decline 5.30% and 7.28%, respectively, year over year. Analysts estimates coffee makes up about 22% of Starbucks’ cost of goods.
Starbucks saw a 5% drop in transactions last year, marking its first annual decline since the COVID pandemic. Analysts predict that the company’s quarterly earnings report this week will show a 4.8% decrease in same-store sales. These figures have prompted Starbucks to take action under its “Back to Starbucks” initiative, aimed at enhancing the customer experience by focusing on quality coffee and improved service.
“I believe that our problems are very fixable and that we have significant strengths to build on,” Niccol said. He highlighted the need to simplify the menu and deliver exceptional experiences for both employees and customers to encourage repeat visits.
The new policy also bans panhandling, discrimination, consuming outside alcohol and vaping, according to the policy posted online. Employees have received training on the new rules.
Starbucks (SBUX) stock is up 7% over the past 12 months, but the company has posted three straight quarters of slumping sales and declining customer visits. Global sales at stores open at least a year fell 7% last quarter and the number of customer transactions sinking by 8%.
The first Starbucks in New Jersey opened in Ridgewood in 1993.
There are over 330 Starbucks in New Jersey, with a presence in 193 communities. Dunkin Donuts has the biggest coffee franchise presence in the state, with 872 locations in 394 cities.