Starbucks Speeds Up Shift to Takeout Due to COVID
Starbucks Corps. said Wednesday that it plans to close some traditional cafe-style locations and open more to-go stores, a plan that was in place before the pandemic but got accelerated because of it, The Wall Street Journal reported.
Starbucks announced that it will close, renovate or move 400 traditional cafes in the U.S. and Canada in the next year and a half, and will open at least 400 alternative locations. The coffee chain aims to open 40 or 50 pickup online locations in the next 18 months. Currently, there are 10,000 Starbucks stores in its Americas division including in the U.S. and Canada. Big cities, where analysts expect commercial rents to fall, will become the focal points for Starbucks’ renovation plans. The company will focus on New York, Chicago, Seattle, San Francisco and other dense urban places for the transition to pickup-only stores.
About 80 percent of the company’s domestic sales are takeaway, Starbucks said, and it expects the portion to grow as the pandemic caused lifestyle restrictions and impacted future work and commute routines.
“We are looking to the future,” CEO Kevin Johnson said. “There is a lot of opportunity to thoughtfully reposition these stores at this time.”
The company expects revenue declines of $3 billion to $3.2 billion due to the pandemic during its current quarter. It also guided to a per share loss of around 64 cents and 79 cents, which is wider than experts expected. The company hopes to return to quarterly same-store sales growth early in the next fiscal year.
Starbucks shares recently traded at $78.68, having fallen 6 percent in 2020.
Johnson said that the transition to pickup stores will not affect the overall employment.