Starbucks is planning to dangle bonuses of up to $1,200 to get baristas moving faster and smiling more as the coffee giant battles sluggish sales.
The payouts will begin this fall, with employees earning bonuses at stores that hit “certain sales, operational and customer service targets,” the Seattle-based coffee company said.
“The new incentive rewards program recognizes partners for the progress they make possible and should strengthen alignment between incentives and the metrics that drive improvements to coffeehouse performance, operations and the customer experience,” the company stated.
Starbucks is also expanding tipping by allowing customers to leave gratuities through its app and at the register — in spite of growing consumer fatigue with tipping culture.
The move is aimed at rewarding better service in real time — and, combined with bonuses, could boost workers’ pay by roughly 5% to 8%, according to the java giant.
Retail experts who spoke to The Post think the new incentive system will pay off for Starbucks.
“$1,200 a year isn’t a windfall, but it’s meaningful if it’s predictable, celebrated and combined with tips and faster pay,” Bob Phibbs, CEO of The Retail Doctor, told The Post.
“When you make the employee’s day, you make the customer’s day — and everyone wins,” he added.
The push to provide better service comes in the wake of disappointing earnings for Starbucks.
While quarterly revenue climbed to $9.9 billion, profits cratered to $293 million from $780 million a year earlier as margins shrank under rising labor costs, inflation and restructuring charges.
A big chunk of the profit hit came from a one-time $266 million tax charge tied to changes in how Starbucks accounts for its China business, masking some underlying momentum.
The company still posted 4% comparable sales growth and rising traffic, signaling its turnaround is gaining traction even as near-term costs weigh on the bottom line.
Starbucks has been pouring money into staffing and store fixes under its turnaround plan — squeezing profitability and raising pressure to drive faster service and higher sales to make up the gap.
The coffee giant is also laying out an aggressive long-term growth plan, aiming to restore profit margins to as high as 15% by 2028 after taking a hit from heavy investments in staffing and store upgrades.
Executives say those costs will eventually be offset by efficiency gains and stronger demand.
The plan was put in place by Brian Niccol, the former Chipotle boss who was installed as chief executive officer of Starbucks in 2024.
Niccol, who inherited a company whose sales were weighed down by long waits exacerbated by understaffing at stores, has sought to revive the brand’s “coffeehouse” feel with his “Back to Starbucks” initiative.
The turnaround hinges on speeding up service and boosting customer traffic, with the company pouring money into staffing, streamlining its menu and revamping its loyalty program to drive repeat visits.
Starbucks has already poured roughly $500 million into ramping up staffing and store operations, putting more workers on the floor during peak hours and introducing new in-store “coach” roles to keep service running smoothly.
Phibbs, who previously worked in a 135-unit coffee franchise, said the nwe bonus program will only drive results if workers clearly see the connection between performance and pay.
“People will call $1,200 ‘only’ $100 a month, but anything that’s reliable and recognized improves morale and cuts turnover,” he said.
“Staff see the link between better service and a real paycheck the next week, managers can reward small wins, and customers get quicker, friendlier service.”
