Starbucks shifts from city centers to suburbs to serve COVID-19 diaspora

The coffee chain will gain 50 new stores in 2021

Starbucks is shifting its focus to the suburbs as consumers migrate from dense metro areas because of the coronavirus pandemic.

Continue Reading Below

Since March lockdowns, which forced many Americans to work from their homes, the Seattle-based coffeehouse chain has recorded an uptick in sales outside of cities, executives said during an earnings call last week.

STARBUCKS CORONAVIRUS RECOVERY BEGINS AS MOST STORES REOPEN GLOBALLY

TickerSecurityLastChangeChange %
SBUXSTARBUCKS CORPORATION98.66+0.46+0.47%

"Broadly speaking, we've seen U.S. transactions migrate from dense metro centers to the suburbs, from cafes to drive-thrus, from early mornings to mid-mornings," CEO Kevin Johnson noted in the earnings call.

As a result, the company decided to reposition its stores, shutting 800 existing stores in North America in fiscal 2021 and opening 850 new ones.

Starbucks in New York City on Aug. 15, 2020. (Photo by Noam Galai/Getty Images)

The closures are part of a "transformation initiative" that Starbucks announced in June, according to executives, who indicated they would be largely in dense metro centers. Urban areas have been largely sidelined for the past seven months, with foot traffic from commuters plummeting because of remote working.

Starbucks had previously disclosed in an earnings report that it would shutter 400 company-operated stores in the U.S. and another 200 stores in Canada.

STARBUCKS TRANSFORMING STORES FOR POST-CORONAVIRUS WORLD: HERE'S WHAT TO EXPECT

"We've adjusted our operations to match these new customer behavior patterns," Johnson said.

GET FOX BUSINESS ON THE GO BY CLICKING HERE 

In June, the coffee giant announced it had accelerated plans to add on-the-go options such as drive-thru access, curbside pickup and walkup windows at hundreds of company-owned store locations.

Starbucks said it expects global sales at stores open at least a year to climb as much as 23% this fiscal year, which runs through the end of September, while U.S. sales grow 22%.

FOX Business' Lucas Manfredi and Thomas Barrabi contributed to this report. 

CLICK HERE TO READ MORE ON FOX BUSINESS