Starbucks closing up to 400 sites
Pickup, drive-thru options to be expanded
Starbucks will close up to 400 company-owned locations over the next 18 months while also speeding up the expansion of “convenience-led formats” such as curbside pickup, drive-thru and mobile-only pickup locations.
The Seattle-based coffee giant says the moves are being driven by changing consumer behaviors that have shifted because of the COVID-19 pandemic. In mid-March, the company closed locations and moved to a “to go” model at other stores.
“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,” Starbucks CEO Kevin Johnson said in a news release Wednesday.
While the company will close up to 400 locations, it still plans to open approximately 300 new stores in its current fiscal year, down from its original goal of 600.
The company said its “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, and convenience-led enhancements such as curbside, drivethru and walk up windows in suburban areas.”
Curbside pickup coming
Curbside pickup has grown at both retailers and restaurants during the pandemic and now Starbucks says customers will soon be able to “utilize curbside pickup” from their cars.
Orders will be placed using the order and pay feature on the Starbucks app and then consumers will check-in at designated parking spots at when they arrive at stores.
Coronavirus hits revenues
Starbucks took a virus-related revenue hit potentially exceeding $3 billion in its third quarter it said in a regulatory filing Wednesday. The virus outbreak also slashed its operating income between $2 billion and $2.2 billion as the virus raged.
Starbucks provided a preliminary estimate for a third-quarter adjusted loss of about 55 cents to 70 cents per share. Analysts polled by FactSet predict a loss of 16 cents per share.
About 95% of U.S. company-run stores are in operation at varying levels of service, though most are operating with reduced hours.