Now there’s still more to come. If you go back to 2020 and you look at where we are right now, the number is about close to 50% higher, but we still have further opportunities. And I think what that’s going to help us, it’s going to help us at peak times. It’s going to help us in the speak 15 minutes that you talked about. But also as we look at demand overall and we look at the portfolio of stores we run and how we work with digital with those, you’re going to see a stock later this afternoon around how we find ways to simplify what happens in the store and also meet a broader set of demand with very careful choices about how we locate stores, what we do with stores, how we digitally amplify what we are doing in terms of demand. But also, in supply, how we link that with the equipment we’re bringing in with a strong operating foundation.
So, there’s more opportunity than what we have now.
Operator: Next question is coming from Brian Harbour from Morgan Stanley. Your line is now live.
Brian Harbour: Good morning. Can I just ask about the step-up in your CapEx budget and what that’s going to be directed towards? And I guess, more broadly, is there any sort of equipment rollout that you’re kind of accelerating versus what you’ve previously talked about, or perhaps store remodels that could be accelerated?
Rachel Ruggeri: Brian, thank you for the question. Our CapEx will increase to around approximately $3 billion, and the majority of that, over 85%, will be focused on new store growth, increase in renovations. So, we’re significantly increasing our renovations to about — in the U.S., about 1,000 renovations next year. So, an increase in new stores globally, renovations, as well as equipment in the stores. But the larger percentage of it is really the new store growth globally as well as the renovation. The new equipment is equipment that we’ve spoken about, the rollout of further rollout of Negedice, for the rollout of Clover Vertica, some continuing work around refreshment and dispense. So, some of those opportunities around creating broader efficiencies to be able to create operational consistency across the stores.
Then outside of that 85%, we’ll be seeing supply chain modernization costs as well as some costs in China supporting an innovation and technology center. And so that’s largely how the costs are made up. What we’re encouraged by that is those tend to have very high return, they’re very high growth-oriented investments. So, we expect to see improvement in our return on invested capital, much like what we saw this year where we achieved nearly 25% on our ROIC, given the very disciplined approach we took to investments last year. And we see this year as we increase our capital, our ability to continue to further that by making very disciplined choices in these high-return, growth-oriented investments.
Operator: Our last question today is coming from Danilo Gargiulo from Bernstein. Your line is now live.
Danilo Gargiulo : Thank you. Laxman, in the press release, you were mentioning that the reinvention plan is moving ahead of schedule. So which aspects of this acceleration are you most proud of? And which aspect do you expect to accelerate the most in the months to come?
Laxman Narasimhan: I’m very pleased with the way that the reinvention plan is implemented. A couple highlights I think the progress we’ve made on staffing and scheduling is extremely strong. Furthermore, if you look at what we’ve been able to accomplished with regard to efficiencies and the culture and the capability and the processes we now have in place in order to systematically attack these efficiencies across the business is actually very strong as well. What we are accelerating on top of that is how we think about purpose-defined stores and what we’re doing in putting together a strong operating foundation in our stores. That is going to really help us as we create the infrastructure, we create the store footprint, against which we will add to the equipment that we have in stores.
Our equipment pipeline, what we have, the way we manage our new equipment, what’s coming in, that entire pipeline and portfolio management is entirely on track. And we feel very good about the progress we are making there. And I think that is something that we’re going to continue to see going forward.
Operator: Thank you. That was our last question. I’ll now turn the call over to Laxman for closing remarks.
Laxman Narasimhan: I want to thank you all for joining us this morning. I want to appreciate all your questions, and I look forward to seeing you all this afternoon when we have our strategic update, and when we get to celebrate our holiday launch with you. Thank you all for joining us this morning.
Operator: Thank you. This concludes Starbucks’ Fourth Quarter and Full Fiscal Year 2023 Conference Call. You may now disconnect.
