Starbucks Bets on Robots to Brew a Turnaround

Starbucks is investing heavily in artificial intelligence and automation as it seeks to revive customer demand after years of sluggish sales, betting that technology can improve efficiency without losing its signature personal touch. At some US drive-through locations, AI-powered systems are now taking customer orders, while baristas inside stores use virtual assistants to recall drink recipes or manage schedules. In the back of shops, automated scanning tools are counting inventory, helping reduce out-of-stock issues that have frustrated customers.

The technology push is part of a broader investment running into hundreds of millions of dollars by the 55-year-old coffee chain. Early signs suggest progress: last week, Starbucks reported its first sales increase in two years at established US stores, its most important market, accounting for about 70% of revenue. However, investor concerns remain. Despite the sales uptick, Starbucks shares fell 5%, reflecting worries that heavy spending  including $500m to boost staffing is weighing on profits. Chief executive Brian Niccol said he remains confident that consistent sales growth will ultimately improve margins, as the company targets $2bn in cost savings over the next three years.

Niccol, who joined Starbucks in 2024, inherited a business under pressure from repeated price hikes, rising competition and labour disputes linked to unionised baristas. He quickly paused price increases, simplified the menu and set a four-minute target for order completion. The company has also cut corporate roles, closed weaker stores and sold a large stake in its China business. While pushing technology, Niccol has emphasised a return to Starbucks’ roots as a community coffeehouse. Stores are being refreshed with new seating, décor and ceramic mugs as part of a $150,000-per-store upgrade plan, while staff have been encouraged to resume handwritten notes on cups.

Starbucks is also testing AI chatbots to suggest drinks based on customer moods and introducing scheduled ordering to reduce wait times. At drive-throughs, automated ordering aims to free staff to focus on hospitality. Despite improved momentum, Niccol has not ruled out future price increases, though he said they would be a “last lever” and likely modest. He is counting on easing inflation, lower coffee prices and reduced tariff pressures to help control costs. Union tensions persist, with organisers accusing the company of delaying contract talks and highlighting executive pay and benefits. Niccol said he is open to discussions but stressed any agreement must be sustainable.

Ultimately, he believes Starbucks’ strength lies not in its technology or coffee alone, but in its cafes as social spaces. “People want these places to gather,” he said. “When we provide that third place where everyone feels welcome, the Starbucks brand becomes the solution.”