Starbucks announces business changes including store closures

During the coronavirus pandemic, Starbucks has seen a major change in the way it does business. And, in a statement, the company says it will have a permanent effect on its business model.

The biggest change it has announced is that it will be closing 400 of its US branches in the next 18 months, as it shifts to focus more on drive-thru or pickup operations.

The chain, which opened its first store in Seattle, Washington, on March 31, 1971, has been adapting its business over the last decade, with its first drive-thru window opening 10 years ago.

As the concept of traditional sit-down coffee shops becomes less popular, this trend has continued, with Covid-19 accelerating the process in a major way.

Consumers are looking for convenience and time-saving options now. This means, in the future, we can expect to see more “convenience-led” formats with stores being closed or converted, and brand new ones being opened.

These will include drive-thru, curbside pickup, and increased use of the mobile ordering via the “Starbucks App”, which lets customers order and pay before they arrive at the shop.

In addition, some of the store layouts will be adapted to make them more efficient. For example, some could be renovated to include a separate counter for mobile orders.

In areas that are heavily populated, like New York, Chicago, and San Francisco, there will be a lot more focus on these measures.

Kevin Johnson, CEO at Starbucks said, “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.”

“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.”