Starbucks to close stores.
Starbucks could close up to 200 Canadian locations
SYDNEY — One of the world's most recognizable coffee companies could close or restructure as many as 200 of its Canadian locations.
The store transformation for Starbucks will take place over the next two years and potentially mean up to 200 store closures, according to a press release from the coffee giant.
Some of those stores, however, will be repositioned with ‘innovative' store formats, such as pick-up, drive-thru and curbside delivery.
The lone Starbucks in Cape Breton is the drive-thru equipped location on Welton Street in Sydney.
No specific decisions regarding that store or any Starbucks location across Canada have been made, according to a company spokesperson.
“We are accelerating our plans to transform our store portfolio, elevate the customer experience for this new era, and drive long-term growth,” according to a statement from Starbucks.
“This strategy aligns closely with rapidly evolving customer preferences, including higher levels of mobile ordering, more contactless pick-up experiences and reduced instore congestion, all of which naturally allow for greater physical distancing.”
Starbucks Corp. says it expects current-quarter operating income to plunge by up to $2.2 billion and sales to decline for the rest of the year even as nearly all its cafes have reopened following easing of coronavirus lockdowns.
The company said it would permanently close about 400 stores in the Americas over the next 18 months and cut its planned new store openings by half to about 300 this fiscal year. Net new store growth in the Americas will grow in fiscal 2021 With the COVID-19 outbreak effectively putting a stop to dining out in most of the United States and Canada for weeks, Starbucks was forced to convert its cafes to drivethru or pick-up only.
The world's largest coffee chain's shares fell more than four per cent as it also forecast a bigger-than-expected current-quarter loss and an over $3-billion fall in revenue in a filing Wednesday with the Securities and Exchange Commission in the United States.
Starbucks projected an adjusted loss of about 55 cents to 70 cents per share for its thirdquarter ending in June, and said it expects U.S. same-store sales to drop by up to 45 per cent. Analysts were expecting a third-quarter loss of 16 cents per share, according to IBES data from Refinitiv.
However, declines are expected to slow towards the end of the year.
The company expects samestore sales in China to drop by 20 to 25 per cent, slightly more optimistic than an earlier forecast of a 25 to 35 per cent fall.
Starbucks said it expects current-quarter operating income to decline between $2 billion and $2.2 billion. It reported an operating income of $1.07 billion in the third quarter of last year.