"It used to be, they [customers] would look at the line at the point of sale, and if that line looked too long, they might decide not to do a transaction at that time and come back later. Now when customers walk into the store, we've alleviated the congestion at the point-of-sale line, and now we have congestion at the hand-off plane," explained Starbucks president and COO Kevin Johnson on a conference call in late January.
"So, they might look at the number of customers around the hand-off plane and the number of beverages on the hand-off plane, and that might create the signal to them that they are going to wait to do their transaction," Johnson continued, adding that congested lines was "the most significant contributing factor" to the company's so-so 3% fiscal first-quarter same-store sales increase.
Promised Starbucks CEO Howard Schultz, "We are now laser-focused on fixing this problem. But the nature of it, too much demand, is an operational challenge we have solved before, and I can assure you we will solve again."
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Mobile orders represented at least 20% of Starbucks sales during peak traffic times at about 1,200 stores in the most recent quarter. That was up significantly from roughly 13% a year ago.
One way for Starbucks to address its congestion is by redesigning its locations for better flow, both from customer and barista standpoints. We recently visited a newly renovated Starbucks store in New York City's Penn Station with a design geared to tackling the logjam issue. The fact that we waited almost 10 minutes to get a large, black iced coffee (store was relatively empty) and weren't sure where to wait for the order are two things we'll let slide as the store just re-opened, and it's bound to have kinks to work out.
Editor's Pick originally published Feb. 22.