Mobile pay is speeding Starbucks customers through the checkout line, but a bottleneck is building for the baristas.
The company has seen mobile order and pay transactions spike throughout its U.S. stores, with 1,200 of its stores experiencing a 20 percent jump in mobile pay and ordering during peak hours.
While these transactions are a boon for the coffee giant, the increase in volume has hurt same-store sales. That's because congestion at the hand-off counter has caused incoming customers to leave without making a purchase, despite lines at the register being short, said Kevin Johnson, Starbucks' president and soon-to-be CEO, during an earnings conference call.
Johnson said that this was a contributing factor in the company's lower-than-expected same-store sales growth during the fiscal first quarter. The coffee giant reported that same-store sales only grew 3 percent, short of Wall Street's anticipated growth of 3.8 percent.
In the previous year, the increase in mobile pay orders only affected about 600 stores.
Starbucks managers across the U.S. have designed their own solutions to this bottlenecking by employing additional staff members, redeploying already hired employees and adding mobile kiosks designed specifically for customers who used the company's mobile pay and ordering.
CEO Howard Schultz said that several Starbucks designers are in Seattle this week working on plans for future Reserve stores and bars and will also tackle this congestion issue. He noted that the company will look to redesign future stores and remodel older shops to adapt to this new payment structure.
Mobile pay and ordering is "a significant part of the morning business," Schultz noted during the earnings call. The company also said mobile alerts could be used to alleviate overcrowding.