Starbucks is making significant changes to its menu, with several beverages set to be discontinued next week.
The coffee giant announced on Monday that starting Tuesday, March 4, it will remove a selection of drinks, including several blended Frappuccino varieties, the Royal English Breakfast Latte, and the White Hot Chocolate.
“These items aren’t commonly purchased, can be complex to make, or are similar to other beverages on our menu,” Starbucks stated.
The company added that the decision to streamline its offerings would help reduce wait times, improve consistency, and “make way for innovation.”
While some drinks will disappear, Starbucks has assured customers that new and seasonal offerings will continue to be introduced.
The company recently launched the Cortado beverage and plans to roll out an “Iced Cherry Chai” this spring.
Starbucks to lay off 1,100 corporate employees
Alongside its menu overhaul, Starbucks is undergoing a broader corporate restructuring.
This week, the company will lay off 1,100 corporate employees worldwide.
CEO Brian Niccol, who took over in August 2024, cited the need for increased operational efficiency as the primary reason for the job cuts.
Niccol was brought in to reinvigorate Starbucks amid declining demand in key markets such as the US and China, where inflation has hit consumer spending.
Where does SBUX stand after the changes?
Since Niccol’s appointment, Starbucks’ stock price has risen nearly 20%, as investors show confidence in his leadership.
The share price hit a new 52-week high on Tuesday, reaching $115.08 and pushing the coffee giant’s market capitalization to $130 billion.
After the announcement of corporate layoffs, Evercore ISI has reaffirmed its Outperform rating on Starbucks, setting a price target of $120.
According to Evercore ISI, Starbucks’ corporate general and administrative expenses stood at $1.8 billion in fiscal 2024, against an operating income of $5.4 billion.
The firm estimates that a 3% reduction in corporate overhead costs could lead to a 1% increase in total operating income.
Since taking over in September, Niccol has introduced some significant changes. Invezz takes a look:
Reversing the open-door policy
One of Niccol’s most controversial moves has been the reversal of Starbucks’ open-door policy.
In January, he announced that only paying customers would be allowed to sit in-store or use the restrooms.
This marked a shift from the company’s 2018 policy, which allowed anyone to enter Starbucks locations, a decision made following public backlash over the arrest of two Black men in a Philadelphia store.
While the open-door policy was originally intended to promote inclusivity, Starbucks employees have since reported challenges with safety and enforcing store policies.
Niccol framed the reversal as a necessary step to ensure both customer and employee comfort.
Return of condiment bars and ceramic mugs
In an effort to restore Starbucks’ traditional café experience, the company reintroduced condiment bars, allowing customers to personalize their drinks with milk, creamer, and sweeteners.
Additionally, those who order beverages “for here” will now receive them in ceramic mugs or glassware.
“Offering customers who sit and stay their beverages in ceramic mugs and glassware is one way we’re returning our cafés to warm, welcoming coffeehouses,” a Starbucks spokesperson said.
The move is also aimed at reducing waste and promoting sustainability.
Eliminating dairy alternative surcharges
Starbucks has also eliminated the extra charge for non-dairy milk, a change that took effect on November 7.
According to the company, substituting non-dairy milk—whether soy, oat, almond, or coconut milk—is the second most requested customization among customers.
The most popular customization remains adding a shot of espresso to handcrafted beverages.
When this change goes into effect on November 7, almost half of Starbucks’ current customers in the US who pay to modify their beverage at company-operated stores will see a price reduction of more than 10%, it added.
Previously, customers paid up to 80 cents extra for non-dairy milk in certain markets.
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