Starbucks Ends Policy That Lets People Hang Out in Its Cafes Without Buying Anything as Sales Slump

Starbucks is abandoning its open-door policy, which allows people to hang out inside its cafes or use its restrooms without buying anything, as it is facing a months-long sales slump. A Starbucks spokesman told The New York Sun, “We want everyone to feel welcome and comfortable in our stores. …This means our cafes, patios, and restrooms are for customers and partners. By setting clear expectations for behavior and use of our spaces, we can create a better environment for everyone. These updates are part of a broader set of changes we are making to enhance the cafe experience as we work to get back to Starbucks.”Starbucks also added a ban on panhandling, discrimination, vaping, and consuming alcohol outside its stores to its code of conduct. The company said people who violate its policy will be asked to leave. While the company will require people to pay to hang out in its cafes, it will allow all customers to receive free refills of hot or iced coffee served in ceramic mugs or personal reusable cups. Previously, that perk was only offered to members of its rewards program. Starbucks implemented its open-door policy after a public relations disaster at one of its locations at Philadelphia. In April 2018, two Black men were arrested after they were accused of trespassing. When a barista asked if they wished to order anything, the two men, Rashon Nelson and Donte Robinson, said they were simply waiting to meet someone for a quick business meeting. The incident spiraled into a PR nightmare when the police showed up, handcuffed the two men, and escorted them out of the building, which, inconveniently for the company known for its left-wing values, was caught on camera and went viral. Starbucks’ chief executive at the time, Kevin Johnson, issued a public apology and called the incident “reprehensible.” “Creating an environment that is both safe and welcoming for everyone is paramount for every store. Regretfully, our practices and training led to a bad outcome — the basis for the call to the Philadelphia police department was wrong. Our store manager never intended for these men to be arrested, and this should never have escalated as it did,” Mr. Johnson said.In addition to creating its open-door policy, Starbucks took the dramatic step of closing more than 8,000 of its stores for an afternoon so that its employees could sit through unconscious bias training sessions. The training included group discussions and videos such as a documentary about racial discrimination titled “You’re Welcome.”Nearly seven years later, however, the company that helped revolutionize how people think about coffee and popularized the pumpkin spice latte is trying to stay true to its values of being the “third place” between the home and office while turning around a sales slump. The company experienced a financial strain during the Covid pandemic. However, in 2021, it saw its sales rebound to pre-pandemic levels partly due to its mobile order feature that lets customers order drinks ahead of time. While the mobile orders and drive-thru option helped the company recover from the pandemic, they also altered people’s perceptions of the coffee chain. In July 2024, the company reported that more than 70 percent of its orders were drive-thru or mobile order purchases, and a higher percentage of the beverages ordered were iced coffees, teas, and lemonades instead of the item that helped make it famous: espresso. In recent years, the company has grappled with rising costs from inflation and a unionization push paired with demands for higher wages. As it raised its prices to offset rising costs, customers have started looking for alternative sources for their caffeine fix, such as other cafes or making coffee at home. In the fourth quarter of 2024, Starbucks reported a 6 percent year-over-year sales decrease and a 10 percent dip in foot traffic in its cafes. Executives are looking for ways to turn around the sales slump. In a press release about its fourth quarter results, the company said its promotions, such as its “pairings menu,” which lets customers buy a small coffee and a croissant or breakfast sandwich for $5 or $6, did “not improve customer behaviors.”As the sales slump continued, the current chief executive of Starbucks, Brian Niccol, said in October the company has to get “back to Starbucks” and “fundamentally change our recent strategy.” He added the coffee chain “must re-establish ourselves as the community coffeehouse.”The end of its open-door policy comes as part of the company’s push to have customers stay in its cafes, which could lead to other food or drink purchases and a shift away from a to-go order model.

Starbucks Ends Policy That Lets People Hang Out in Its Cafes Without Buying Anything as Sales Slump

Starbucks Ends Policy That Lets People Hang Out in Its Cafes Without Buying Anything as Sales Slump

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