Starbucks has announced plans to close up to 400 company-owned stores across the U.S. and Canada in favor of a new “pickup” store concept involving mobile ordering.
The Seattle-based company opened its first pickup store in November at Penn Plaza in Manhattan and is planning a second near Grand Central Terminal. While the concept was formulated ahead of the COVID-19 crisis ”“ Starbucks stated roughly 80% of its pre-pandemic U.S. transactions were grab-and-go with prepayments via its app ”“ the company noted the ongoing health emergency helped to speed its rollout.
Starbucks also said it would offer customers curbside pickup from their cars with prepaid orders on its app. A select number of locations will be designated for a pilot program that exclusively offers this format.
Starbucks did not identify which stores would be closing, nor did it provide a timetable for the closures. The company acknowledged the shift to the new format would result in lost jobs.
“While we believe the focused actions we are taking ”“ to deliver contactless customer experiences, coupled with continued beverage innovation and expanded digital capabilities ”“ will over time allow us to recover the business and recreate the momentum we experienced prior to the pandemic, we need to acknowledge that during this COVID-19 economy, many of our stores will maintain modified operations and reduced hours and will not require the same level of staffing,” said Kevin Johnson, Starbucks president and CEO.
“As we stated recently in our earnings report, as customer traffic builds, we will see an increasing number of partner hours allocated to our stores,” Johnson said.
“Until that time, however, the number of hours many of our partners were used to pre-pandemic won”™t be available. It is important that we are open and honest about the current reality of the COVID-19 economy, and work directly with each partner to ensure they understand the options in front of them whether they choose to stay with Starbucks or choose to pursue a different path.”