Starbucks to close 400 stores, expand pick-up options ‘to meet changing customers behaviors’

Starbucks has announced plans to close 400 company-owned locations while boosting “convenience-led formats” — such as curbside pickup and mobile ordering — as it prepares to adapt to the new post-coronavirus reality.

The Seattle-based coffee giant said in a statement Wednesday that it has started accelerating plans to integrate both the physical and digital coffee experiences.

The changes, which should come as a natural evolution of “already evolving customer needs of convenience,” were expedited by a change in the retail environment brought forth by the coronavirus pandemic.

The closing of the stores, as part of the “U.S. store portfolio transformation," should happen within the next 18 months, the company said. They will come in tandem with an increase in options for customers to order their grande Frapuccinos from the convenience of their phones.

The company announced plans to expand “new Starbucks Pickup stores in dense markets including New York City, Chicago, Seattle and San Francisco,” as well as “convenience-led enhancements such as curbside, drive-thru and walk up windows in suburban areas.”

Starbucks’ first pickup store has been operating in New York City since November 2019. The experience proved to be a success: “Customer engagement has been high and partner feedback on the store design and customer experience has been positive,” according to the company, which also plans to increase drive-thru and curbside pickups.

“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,” Kevin Johnson, the company’s CEO, said.

The acceleration is part of the company’s strategy to deal with shifting customer behaviors.

Ever since it opened its doors in Seattle nearly 50 years ago, Starbucks has worked as an extension of the living room or work space of many of its faithful customers.

“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,” according to Johnson.

With the changes, Starbucks hopes to cater to evolving customer preferences, which now include more mobile ordering, more “contactless pick-up experiences” and fewer trips to physical stores, “all of which naturally allow for greater physical distancing.”

With over 32,000 stores worldwide, Starbucks is the world’s premier roaster and retailer of specialty coffee.