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Home Stocks And Finance

Can Starbucks address long lines at its airport cafes?

November 24, 2024
in Stocks And Finance
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Can Starbucks address long lines at its airport cafes?
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Customers wait in a long line at a Starbucks cafe in a terminal at Miami International Airport, in Miami, Dec. 12, 2022.

Jeff Greenberg | Universal Images Group | Getty Images

Air travelers face a host of headaches on their journeys: slow security lines, long waits for plush lounges, the threat of delays or cancellations — and the airport Starbucks.

Many travelers, flight crews and even airport employees have at some point encountered long wait times for their Starbucks cappuccinos, cold brews and egg bites.

“They need to have a better system,” said Coresa Barrino, a Starbucks patron at New York’s LaGuardia Airport Terminal B earlier this month who said she had been waiting 10 minutes and counting for her coffee. The nursing assistant, who was taking a flight back to Charlotte, North Carolina, said the wait when she buys her coffee at a Starbucks in Charlotte is about two minutes.

The long waits have caught the attention of the coffee chain’s new CEO, Brian Niccol, who joined Starbucks from Chipotle in September, pledging to win back customers and reverse the company’s sales slump.

Niccol told investors he thinks that licensed locations, such as those inside Target stores or airports, are interested in following the company’s strategy of “getting back to Starbucks.”

“When I think about the airports and such, there’s such a huge opportunity for us to simplify some of the execution there so that we get people the great throughput that they want so they can get on their way,” Niccol said on the company’s quarterly conference call Oct. 30.

Starbucks’ airport location staff — and company technology — will be put to the test this week during some of the busiest travel days of the year. The Transportation Security Administration forecast a record number of travelers during Thanksgiving week and said Sunday, Dec. 1, could be the busiest day of the year, with more than 3 million people screened at U.S. airports.

The surge in air travel, especially during peak times such as Thanksgiving, has led to congestion in airport security lines, in lounges and at gates — problems that airlines and the federal government are trying to fix. For the aviation industry, bottlenecks at airport Starbucks are just another sign of soaring demand and overcrowded airports.

A record 1.05 billion people boarded airplanes going either to, from or between U.S. airports in 2023, narrowly topping the total in 2019, before the pandemic, according to the U.S. Department of Transportation.

Struggles and fresh approaches

Starbucks has recently struggled. Its sales fell for the third straight quarter in the period ended Sept. 30, as consumers pushed back against higher prices and ignored initiatives such as discounts and energy drinks aimed at bringing customers back. Same-store sales in the U.S. declined by 6% from a year earlier.

In late October, Niccol unveiled plans aimed at improving customers’ experiences and reviving the company’s sales, from bringing back condiment bars, to eliminating surcharges for dairy alternatives and cutting down the menu.

Cutting wait time is a key goal: He wants to trim service times down to four minutes, which would shrink long lines and improve the customer experience.

And while Starbucks started rolling out mobile order and pay to its airport locations in 2022, the change can sometimes add to the confusion and chaos at the cafe counter instead of resolving it. Plus, some travelers might not be regular Starbucks customers who already have the app downloaded.

Improving the coffee chain’s airport outposts could boost both sales and the brand’s reputation during a time when it needs it most. Even the customers Starbucks has lost might visit an airport location while they’re traveling.

With travelers returning in droves after the pandemic, it gives Starbucks and other restaurant chains a chance to boost sales.

Concessions contribute about 4% of U.S. airport revenue annually, according to the latest available Federal Aviation Administration data, but they’re an important feature to many passengers, who have limited time — and, often, energy — to fuel up before a flight.

At Dallas Fort Worth International Airport, revenue from food and beverage outlets is growing faster than passenger numbers, said Jennifer Simkins, the airport’s assistant vice president of concessions. The airport has become the world’s third-busiest for passengers, up from 10th place in 2019, according to Airports Council International.

Airlines are also packing more seats on their aircraft and in some cases are flying larger jets.

More passengers per plane means restaurants can become crowded during peak times with more customers waiting to be served and space limited, said Ursula Cassinerio, an assistant vice president at Moody’s Ratings who covers airports.

She noted that many airports have been undergoing major renovations, if not building new terminals. That means “more opportunities for revenue if you have more square footage for retail and…



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Tags: AddressAirlinesAirportBreaking News: BusinessBreaking News: EconomyBreaking News: MarketsBrian NiccolBusinessbusiness newscafesCharlotteChipotle Mexican Grill IncDallasDelta Air Lines IncDFW AirportEconomyFort WorthLaGuardia AirportLifestyleLineslongMarketsNew YorkRestaurantsRetail industryStarbucksStarbucks CorpTarget CorpTravelUber Technologies IncUnited States
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