Starbucks to Revamp Stores for More Drive-Thru, Pickup Orders After $3.2 Billion Quarterly Loss in Revenues

by Alex Tostado

Seattle — Starbucks Coffee plans to accelerate the transformation of its store portfolio across the United States amid the ongoing COVID-19 pandemic. Over the next 18 months, the coffee chain will increase convenience-led formats in company-operated locations with drive-thru and curbside pickup options, as well as Starbucks Pickup location.

In a letter to shareholders, released through an SEC filing, Starbucks announced that it plans to close approximately 400 company-operated U.S. stores over the next 18 months as part of this new focus on drive-thru and pickup. In that same letter, Starbucks notes that it plans to open 300 new stores this year, though that is down from its initial plan of 600. Even before the COVID-19 outbreak, 80 percent of Starbucks transactions were “on-the-go” sales, according to the letter.

Due to the shift in the retail environment because of amid the global pandemic, including store closures and decreased customer sales, Starbucks posted a $3.2 billion loss in revenue during fiscal third quarter and expects same-store sales in the United States and Canada to decline 10 percent to 20 percent for the full fiscal year, according to CNBC.

The company’s U.S. store portfolio transformation includes the expansion of new Starbucks Pickup stores in dense markets, including New York City, Chicago, Seattle and San Francisco, as well as curbside, drive-thru and walk-up windows in suburban areas. With the increased use of the Starbucks App to order ahead and Starbucks Delivers through Uber Eats, the company will renovate select store layouts, including the addition of a separate counter for mobile orders at high-volume stores.

Starbucks plans to expand its Starbucks Pickup store locations and increase the number of stores offering curbside pickup. Additionally, the company will enhance its original on-the-go drive-thru experience with double-lane drive-thru or drive-thru plus curbside pickup options.

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