Coffee shop retail giant Starbucks, announced it will close a portion of its stores and focus on transforming its brand. According to CNN, Starbucks will close up to 400 of its stores in the United States and Canada. The restructuring follows months of closed stores and lost revenue to stop the spread of Covid-19, known as the Coronavirus. Starbucks said it estimates it earned $3.2 billion less in revenue in its third quarter, compared to 2019, CNN reported.
In addition to the store closures, Starbucks will move to a more pick-up friendly model and move away from its cafe model to deal with concerns over the spread of Covid-19. The company expects to open about 300 pickup only locations in North America. Starbucks dominates coffee chains in New York City with more than 300 stores citywide.
“Starbucks stores have always been known as the ’third place,’ a welcoming place outside of our home and work where we connect over a cup of coffee,” said Kevin Johnson, CEO, Starbucks. “As we navigate through the COVID-19 crisis, we are accelerating our store transformation plans to address the realities of the current situation, while still providing a safe, familiar and convenient experience for our customers.”
Starbucks released more details about its transformation. The company revealed in a statement that U.S. store portfolio transformations includes the expansion of new Starbucks Pickup stores in dense markets including New York City, Chicago, Seattle and San Francisco, and convenience-led enhancements such as curbside, drive-thru and walk up windows in suburban areas. With customers’ increased use of the Starbucks App to order ahead, and the national availability of Starbucks® Delivers through Uber Eats, Starbucks will also renovate select store layouts, including the addition of a separate counter for mobile orders at high volume stores, which will make it easier for customers and delivery couriers to pick up their order. Core to the Starbucks Experience is the connection between the customer and partners (employees). Starbucks new designs will enable partners to focus on the customer and craft beverages, as well as enhance how partners work together.