Industry News | July 26, 2016 | QSR Exclusive Brief

Starbucks Keeps Evolving, Announces More Changes

The company's new dress code allows for a range of shirt and hair colors, as well as hats. image used with permission.

Fresh off announcing a record fiscal third quarter, Starbucks released details about its anticipated employee dress-code change, as well as a new organizational structure in the C-suite.

On Monday, Starbucks unveiled its new dress code, which allows a range of shirt colors beyond black and white, as well as patterns. The code also welcomes shorts, skirts, dresses, and jeans; beanies, fedoras, and other hats; and any hair color, so long as it’s permanent or semi-permanent.

“I believe these changes work well with our iconic green apron and also complement the passion partners bring to our coffee and their craft,” said Cosimo LaPorta, executive vice president of U.S. Retail Store Operations, in a statement. “We want partners to be as proud of their look as they are when they tie on their green apron.” 

Starbucks had teased the impending dress-code changes earlier this month, when it announced employee incentive changes that improved pay, benefits, and company stock allotments. Once in place later this year, the new incentives will increase compensation for team members between 5 and 15 percent across the country.

In addition to the new dress code, Starbucks announced a shift in its organizational structure at the executive level. Company CEO Howard Schultz laid out the new structure in a letter to team members, saying that the company’s long-term strategy required a “higher level of thoughtfulness, creativity, and discipline than at any other time in [its] history.”

“To be among the world’s most respected and enduring companies, we must constantly look around corners and let our curiosity and courage drive innovation,” he said in the letter. “With this mindset and purpose, I have no doubt we can continue to grow the company sustainably, and in ways that will continue to make us all proud.”

Schultz said he will continue to focus on long-term strategy and innovation, which will include working with executive vice president and global chief strategy officer Matt Ryan on premium coffee experiences such as the Starbucks Reserve and Roastery brand. In addition, Schultz will help Ryan develop Princi, the boutique Italian bakery that Starbucks invested in earlier this month.

Meanwhile, Cliff Burrows, group president of U.S. and the Americas, will shift his role to oversee global expansion of Reserve and Roastery units. He’ll lead the new Siren Retail group, which will also include stand-alone Princi locations and the global Teavana business.

Starbucks president and COO Kevin Johnson will commit his attention to growing the company’s core business, functional teams, and channel development, and John Culver, a long-time company partner, has been named group president of Starbucks Global Retail. (Click here to read Schultz’s letter and learn more about the structural changes.)

“These changes will ensure we continue to reaffirm our leadership in all things coffee, enhance the partner experience, and exceed the expectations of our customers and shareholders while using our scale for good to maximize our social impact,” Schultz said in his letter.

Last week, Starbucks announced that global comparable store sales had increased 4 percent in 2016’s fiscal third quarter.

By Sam Oches

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