Starbucks to close hundreds of stores as it leans into on-the-go model

By Joey Morona - Advance Ohio Media, Cleveland (TNS)

CLEVELAND, Ohio — Remember the days of waiting in line at Starbucks while the person in front of you ordered an overly complicated drink? Forget that.

The coffee giant announced plans Wednesday to transform its portfolio of stores in the U.S. into a brand built around on-the-go convenience and mobile ordering. That means expanding the number of stores with drive-thru or curbside service, and opening new pickup-only locations.

In a SEC filing, the company said 80% of transactions before the pandemic were of the pickup-and-go variety, and it had already been plotting out ways to best serve customers’ changing habits. The coronavirus shutdown, however, accelerated those plans, which will now take place over the next 18 months.

“This strategy aligns closely with rapidly evolving customer preferences that have accelerated as a result of COVID-19, including higher levels of mobile ordering, more contactless pick-up experiences and reduced in-store congestion, all of which naturally allow for greater physical distancing,” the company wrote.

Part of the transformation includes closing 400 stores through the end of 2021. That number, however, will be offset by the opening of perhaps a greater number of new stores with the on-the-go format.

The 400 closings represent a small fraction of Starbucks’ roughly 8,800 company-owned stores in the U.S.

95% of those stores have reopened since the shutdown. Still, the company is expecting a loss of as much as $3.2 billion in sales this quarter as a result of the pandemic.

By Joey Morona

Advance Ohio Media, Cleveland (TNS)

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