Word: stores
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...years to roll out ovens, the biggest thing to hit Starbucks since the blender's 1995 debut. Starbucks knew there was demand--witness the bags of food carried in--but creating a good-looking oven that could cook a range of items and contain the odor--lest a store not smell first and foremost of coffee--was a challenge. Even after some breakfast sandwiches were developed, entirely new deployment routines had to be created so that employees would not slow the line. "If our espresso-only or drip-only customers suffered," says Alling, "it wouldn't be worth doing...
...breakfast sandwiches are a success in the handful of big cities they have reached so far, like Chicago and New York, where they add an average of $35,000 a year to the sales of each store--more than the $30,000 that comes from cold sandwiches and salads. Hot lunch sandwiches and quiche, now being tested, might someday draw a midday crowd--a real prospect for a company that currently sees 60% of its sales before 10 a.m. And while executives won't admit it, ovens also hedge against competitors like Dunkin' Donuts, McDonald's and Burger King, which...
There's only so much stuff you can run through a 1,500-sq.-ft. retail store, although Starbucks has added everything from CDs to books to Scrabble sets. "You have to have new products. That's the retailer's dilemma," says John Glass, who covers Starbucks for CIBC World Markets. But every new item, whether edible or readable, increases the complexity of the organization, and complexity is a killer...
...what happens when Starbucks introduces drive-throughs, which are at 58% of the stores it builds today? It took a decade for the company to put in its first drive-through because, says Schultz, "we wanted to ensure that once we did, we didn't take Starbucks down this road of fast-food mentality." Again the dreaded FF words. Next year Starbucks will open some 600 drive-throughs, many on busy highways--a huge departure from the store's original Main Street philosophy. Here's why: drive-throughs significantly boost a store's total sales...
...homey in-store experience translates to a drive-through is another question. Executives try to explain, but the disconnect is so obvious that the Starbucks drive-through is lately being reinvented. Some changes boost efficiency (an order-confirmation screen reduces errors), but plenty of the redesign is aesthetic. Neatly landscaped hedges and big drawings of coffee pots funnel you through a chute that takes you round to the pickup window, which is broad and deep and designed to visually draw you into the store...