Starbucks eyes store reopenings as coronavirus fight shows progress

The coffeehouse chain's US stores were limited to drive-thru service in recent weeks.

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Starbucks is exploring plans to reopen its U.S. stores after weeks of limited service due to the coronavirus pandemic, CEO Kevin Johnson said in a letter to employees on Thursday.

Johnson said the coffeehouse chain has moved to a “monitor and adapt” phase of its response to the pandemic as federal and state authorities conduct discussions to restart the U.S. economy. Starbucks stores will ramp up operations on a case-by-case basis, according to local public health guidance.

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“After several weeks of isolation, as many markets around the world have directed people to ‘shelter at home,’ we are beginning to see progress,” Johnson said.

Starbucks executives will use four factors to determine how to proceed with store reopenings – the outbreak’s status in the local community, guidance from public health officials, community sentiment and the store’s readiness to return to normal operations. Some Starbucks stores will continue to operate as drive-thru-only locations, while others will resume contactless pickup services and in-store “to go” orders.

Johnson noted the company is also using digital tools to assist its field officials in the decision-making process, including government data on pandemic trends in specific regions.

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SBUXSTARBUCKS CORPORATION84.30+1.26+1.52%

“We have tested a variety of service options in more than 300 stores across the U.S. over the last few weeks, including contactless service, entryway pickup, curbside delivery and at-home delivery,” the Starbucks CEO added. “We are finding new, innovative ways to serve our communities safely while working hard to exceed public health requirements and adjust to new customer expectations.”

Starbucks stores in the U.S. and Canada have operated on a limited basis since March 20, when company executives shuttered cafes to comply with federal guidance on social distancing. Service was reduced to drive-thru and delivery only at most locations.

New York, USA - 29 September, 2016: Starbucks Coffee shop inside the Port Authority Bus Terminal in Manhattan.

More than 60 percent of the affected Starbucks store locations were equipped with drive-thru windows. About 80 percent of Starbucks orders were placed “to-go” prior to the pandemic.

Starbucks has enacted several coronavirus-related measures to aid employees, including expanded paid sick leave, catastrophe pay for workers exposed to the virus and an extra $3 in hourly wages for employees who worked their normal shifts. The company extended those temporary benefits through the end of May.

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Coronavirus-related interruptions in the U.S. and abroad are expected to have a major negative impact on Starbucks’ bottom line in its second quarter.

In an 8-K filing earlier this month, Starbucks forecast adjusted earnings per share of 32 cents for the quarter, down from 60 cents in the same quarter one year ago. U.S. same-store sales are expected to decline three percent, “reflecting the very rapid onset of COVID-19 business impacts in the final three weeks of the quarter.”

Same-store sales were up eight percent prior to March 11, when authorities began implementing shelter-in-place orders. Starbucks withdrew its full-year guidance for fiscal 2020, citing uncertainty related to the pandemic.

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This story has been updated.