For the last month, Starbucks chief executive officer Howard Schultz and other company leaders have met with retail partners (employees) in small groups around the country to co-create the next chapter of Starbucks. In dozens of collaborations sessions, partners shared their frustrations, hopes and ideas. On Tuesday, Schultz shared the new investments that came out those sessions.
A truly different kind of company, for partners, by partners
During the Starbucks quarterly earnings call, Schultz today announced the following investments designed to transform and elevate the experience of Starbucks partners and customers – all co-created by retail and non-retail partners working together. They will bring the total investments in the partner and store experience to $1 billion this fiscal year.
- The return of the Coffee Master and Black Apron programs this Summer, reaffirming and recognizing Starbucks partners deep passion for—and commitment to—coffee excellence. Additionally, eligible partners who complete the Coffee Master program will have the chance to be selected for the Leadership in Origin program at Hacienda Alsacia, Starbucks coffee farm in Costa Rica.
- More opportunities for partners to connect, be heard and have a voice, through the launch of a new partner app in August to create one digital community for all 240,000 U.S. partners, extending collaboration sessions to support partners, plants, retail leaders and to every store with dedicated connection time over the next month.
- Additional and more effective training, including doubling the amount of training time for new baristas beginning June 21, doubling the amount of training time for new shift supervisors beginning August 30, and more training for baristas and supervisors already in role. Enhancements also include a redesigned “First Sip” barista training program, a newly designed shift supervisor program and more hands-on practice time for baristas.
- Increased pay and support with financial stability. As previously announced, Starbucks is moving all U.S. store partners to a $15/hour floor this summer, effective August 1, and also adding incremental increases that will apply to all U.S. store partners, while recognizing and rewarding tenure. On August 1, average hourly pay at Starbucks will be nearly $17/hour nationally. All partners hired on or before May 2 will get either a 3% raise or $15/hour, whichever is higher.
Further, Starbucks will continue to recognize tenured partners. Partners with 2-5 years of service will receive at least a 5% increase or move to 5% above the market start rate, whichever is higher. Partners with 5+ years of service will receive at least a 7% increase or move to 10% above the market start rate, whichever is higher.
On August 1, Starbucks will also double our planned investments in store manager, assistant store manager and shift manager pay for leaders hired on or before May 2. These are one-time investments in base pay in addition to our planned FY23 raises this fall.
The company is also planning to introduce credit /debit card tipping, equipment and technology enhancements and launch a modernized recognitions program. Also during the Tuesday earnings call, Brady Brewer, Starbucks chief marketing officer, shared plans for a series of branded NFT collections, the ownership of which initiates community membership, and allows for access to exclusive experiences and perks.
“From our beginning, we have nurtured human connection and served a fundamental belief that coffee brings us together. We brought this to life in what we’ve called the Third Place – a place between home and work where you could connect and feel a sense of belonging, over coffee. Now, we are extending the Third Place concept of Starbucks into a new kind of community,” Brewer said during the earnings call. “… We are creating a Digital Third Place.”
To read the full press release on investments, go here.
The ceo’s letter to partners
In a letter to Starbucks partner on Tuesday, Schultz reflected on what he’s learned during collaboration sessions over the last month and shared his ongoing commitment:
“As I shared with you last month, love and responsibility are what brought me back to Starbucks: my love of the company and my deep responsibility to our partners and shareholders. Hearing from so many of you since my return has only deepened my commitment and affirmed the need to take bold action to restore your trust and belief in Starbucks. I could not be more optimistic or confident in our next chapter that is now underway.”
Read the full letter here.
Video: Creating our future together as partners
Watch a two-minute video featuring the collaboration sessions and new investments.
New investments at-a-glance
Starbucks partners also received a one-page poster detailing the new investments and when they’ll start to see them.