Starbucks removing 10% surchage on non-dairy beverage orders

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Starbucks Corp. will stop charging an extra fee on beverages with non-dairy milk alternatives as part of an effort to “win back customers,” according to chief executive Brian Niccol.

The initiative was announced following the release of the company’s 2024 Q4 earnings report this week. Starbucks will remove its 10 per cent surcharge on customized non-dairy orders, including soy, oat, almond and coconut beverages, starting Nov. 7.

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“Core to the Starbucks Experience is the ability to customize your beverage to make it yours. By removing the extra charge for non-dairy, we’re embracing all the ways our customers enjoy their Starbucks,” Niccol said.

The surcharge affects more than a quarter of Canadian customers, as non-dairy substitutions are the second most requested modification at Starbucks shops, behind additional espresso shots.

The company’s Q4 and full fiscal year results, released Wednesday, showed North American net revenues were down three per cent from 2023, due to a six per cent drop in comparable store sales, which was in turn led by a 10 per cent decline in comparable transactions. The results were partially offset by a four per cent average ticket increase and a decrease in Starbucks’ licensed store business.

Overall, global comparable store sales were down two per cent, also led by a four per cent drop in comparable transactions — a decline minimally offset by a two per cent increase in average ticket.

The results reflected a challenged customer experience, leading to the company’s shift in strategy, according to the Starbucks release.

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Removing the surcharge on non-dairy milk alternatives is one of the few changes Starbucks has made since Niccol joined the company as chief executive and chair of the board on September 9.

In a newsletter, Niccol addressed his plans to improve the company by making customer experiences feel less transactional and by improving menus, products and wait times in stores. Niccol said he is committed to “getting back to Starbucks.”

“My experience tells me that when we get back to our core identity and consistently deliver a great experience, our customers will come back. We have a clear plan and are moving quickly to return Starbucks to growth,” said Niccol.

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