Starbucks is grappling with operational issues largely due to the rise in mobile orders, which now make up about a third of the company’s sales. This surge in digital orders has caused overcrowding at counters, longer wait times, and frustration among both customers and baristas.
Incoming CEO Brian Niccol will face the task of addressing these challenges, as Starbucks’ same-store sales have been on the decline. Former CEO Howard Schultz has called the mobile app the company’s “biggest Achilles heel,” noting that while mobile orders generate more profit due to add-ons, they also strain baristas’ efficiency and overall service.
The growing pains of mobile ordering became especially evident during peak morning hours, with many customers deterred by the long wait times. Schultz himself experienced this firsthand at a Chicago store, describing the chaotic scene as contrary to Starbucks’ intended atmosphere.
Niccol’s challenge will be to streamline mobile orders to reduce overcrowding and bring Starbucks closer to its original identity as a “third place” for customers to relax between home and work. However, the company has not sufficiently adjusted its operations to anticipate this shift in consumer behavior, making it harder to manage the digital sales boom.
Starbucks has faced these operational hurdles since 2017 when Schultz stepped down as CEO, and Kevin Johnson took over. Johnson’s leadership focused on digital growth but didn’t prepare Starbucks for the surge in mobile orders, leading to operational struggles.
Schultz returned as interim CEO in 2022 but criticized the company for not investing in technology to accommodate the mobile order boom sooner. Investors, too, are now seeing the need for Niccol to prioritize fixing digital ordering issues to enhance in-store experiences and avoid customer dissatisfaction.
Baristas have felt the strain of these operational difficulties, with many experiencing burnout, exacerbated by the overwhelming influx of mobile orders. This frustration has contributed to the rise of unionization efforts among Starbucks workers.
Starbucks Workers United, representing employees at about 450 U.S. stores, has called on the company to suspend mobile ordering during busy promotional periods. In response, Starbucks has begun making changes, such as allowing for the temporary suspension of mobile orders during promotions.
Despite these challenges, Starbucks has been working to improve its digital operations. Under Schultz’s leadership, the company introduced new equipment and technology to speed up service. Recent advancements include showing mobile order progress within the app and rolling out a new system to help baristas make drinks more efficient.
However, implementing these changes has been slow, with only 40% of stores expected to receive new machines by the end of 2026. Investors are optimistic that Niccol’s experience with streamlining operations at Chipotle could help Starbucks overcome its mobile order challenges and boost customer satisfaction.
