Starbucks Corp.'s (Nasdaq SBUX:) Siren System is nearing the debut of its back-of-house technology, which is designed to reduce the time required to prepare drinks and food.
The system, which was first introduced at Seattle Coffee's Investor Day in September, is the centerpiece of its $450 million initiative to streamline store operations. Sara Trilling, the head of North America Operations, said on Tuesday that it will be available in U.S. cafes by the third quarter 2023.
Trilling stated that "These stations already have a measurable impact both on productivity and throughput." "We are quite bullish about them."
Laxman Nairsimhan, the new CEO of Starbucks, led Tuesday's conference call for the first. The former Reckitt CEO and longtime consultant emphasized efficiency. He pledged to increase profit margins through streamlining operations. This included simplifying everything from the cups and lids that Starbucks purchases to how it brews its coffee.
Narasimhan stated, "Our performance may be strong but our health could improve." We are going back to basics. "We have barely scratched the top of what this iconic company and brand can do."
The company began rolling out the new Clover Vertica machines in recent months, which reduce the time needed to brew espresso and coffee. Seattle permits show that dozens of stores already have the machines installed. Narasimhan also said that nearly 40% of coffee shops owned by companies in the U.S. would have the machines by the end the year.
Starbucks has seen a strong increase in sales in North America, up 12% over the same period in 2013. Transactions were also up 6% and ticket sizes rose 5%.
Starbucks executives claim that the company is attracting younger customers by offering them the option to create their own drinks. Sales have also increased since the company released its new line of drinks infused with olive oil.
Trilling stated that "we're serving more clients during our busiest days than we did before the pandemic." You can see this in the drive-thru queues and also in our productivity figures.
Starbucks reported $8.7 billion of revenue in the first quarter, which was higher than Wall Street's expectations. The company also reported a profit margin of 17%. After-hours, shares of Starbucks' stock fell 5% as the company did not upgrade its fiscal forecast amid economic uncertainty.