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Starbucks is rolling out customer-facing artificial intelligence tools across its stores as part of a long-term investment intended to reignite growth after a prolonged slowdown in its core market.
At drive-throughs, some customers are already encountering AI systems that take orders, while baristas inside stores can rely on a virtual assistant to recall recipes or manage schedules. Elsewhere, scanning technology is now handling inventory counts, removing a time-consuming task from store teams while aiming to reduce out-of-stock issues.
The technology roll-out forms part of hundreds of millions of dollars in investment by the 55-year-old coffee chain. The effort appears to be gaining traction, with the firm recently reporting its first increase in same-store sales in the US in two years, a market that generates about 70% of company revenue.
Chief Executive Brian Niccol said he expects consistent sales growth to resolve those concerns over time. “I think that's all going to come,” he commented to the BBC. “I really do believe we've got the right plan in place.”
Cost pressure and leadership reset
Niccol joined Starbucks in 2024 as the company faced falling sales, rising competition, and backlash linked to labor disputes and geopolitical issues. He moved quickly to halt price increases, simplify the menu, and set a four-minute target for order completion.
Starbucks also cut thousands of corporate jobs, closed underperforming locations, and sold a large stake in its Chinese business. At the same time, the company committed to finding $2bn in cost savings over the next three years, making technology investment a key lever for protecting margins.
Despite the AI push, Niccol has emphasized reconnecting with Starbucks’ roots as a neighborhood gathering place. “We lost our focus because we got a little too distracted on efficiency and technology,” he said. “The business is a coffee shop-by-coffee shop business.”
Balancing technology and human connection
Stores are being refreshed with armchairs, new paint, and ceramic mugs as part of a $150,000-per-store upgrade expected to take four years. Baristas have also returned to writing names on cups by hand, while stricter uniform standards and bathroom access rules have been introduced.
Niccol said the use of AI is intended to improve customer service rather than replace personal interaction. “It's a way for us to make the experience have less friction,” he said.
Starbucks is testing an AI chatbot to help match drinks to customer moods and introducing scheduled ordering to cut wait times. At an investor day, Niccol outlined plans to nearly double the company’s global footprint to almost 40,000 stores, driven largely by international growth.
Price increases are no longer ruled out, however, although Niccol said they remain a last resort and would be muted. He also pointed to easing inflation, lower coffee prices, and the removal of US tariffs on coffee as potential tailwinds.
Despite the forward direction of travel, union tensions persist, with officials criticizing the pace of contract talks. Niccol said he wants a deal that is viable and sustainable, adding that Starbucks will not reverse its investment in store staffing.
“What sets us apart is not our coffee,” he said. “People want these places to gather.”
