Choice Run Amok: The Case of Starbucks

By Shlomo Maital  

   There are a lot of things wrong with capitalism.  Not the worst one is this: Choice.

    Businesses are driven by desperate efforts to grow revenues, to proliferate the choices they offer.  The result:  six miles of breakfast cereals on supermarket shelves.

     And …Starbucks, which offers “….some combination of tall venti grande double-pump, one to four shots of espresso, half-caf, oat milk, nonfat milk, soy milk, milk milk, whipped cream, syrup, brown sugar, white sugar, no sugar and mocha drizzle, from the pike position with two and a half twists.”

        Writing in today’s New York Times, Bill Saporito details Starbucks’ dilemma, after firing their CEO (who created the problem) and appointing Chipotle’s previous CEO, who created the same problem at his previous job.

          At Starbucks,  “…There’s often a crowd waiting at the bar end because Gen Z, which tends to prefer anything but human interface, has overwhelmed the baristas with the same orders-of-magnitude drinks. Starbucks says there are more than 170,000 possible drink combinations available, but outside estimates have put the number at more than 300 billion. And the person in front of you always seems to be ordering 100 million of them.”

         Three hundred billion combinations.  Yikes.  Why?  Wall St. demands constant growth.  You grow, by expanding your offerings, right?  

          Well, maybe not.  Maybe you confuse customers, make life impossible for baristas who have to provide those choices, and create long long looooong lines of people waiting for their half-caf half soy half milk two shots no foam etc….

          Long ago, I wrote an academic article explaining why, in contradiction to economic theory, more choice means less wellbeing.  Sometimes, we are better off when we ourselves limit our own choices. 

           Saporito notes that there are fast-food chains that offer very simple limited menus and are thriving.   I think, in many cases, less is more. Less choice is more simplicity, less complexity.  Capitalism is choice run amok.  Time to rethink it.