Starbucks is speeding up its plans to upgrade U.S. stores with convenient service options for safety-minded customers as it looks to bounce back from the coronavirus pandemic, the company announced on Wednesday.
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The Seattle-based coffeehouse chain will add on-the-go options such as drive-thru access, curbside pickup and walkup windows at hundreds of company-owned store locations to accommodate customers in the age of social distancing. The new service options will be integrated with the Starbucks app and implemented at stores over the next 18 months, well ahead of Starbucks’ original timetable of three to five years.
In addition, a number of Starbucks Pickup stores will open in densely populated cities such as New York, Chicago, Seattle and San Francisco after a successful pilot program in Manhattan’s Penn Plaza. The new streamlined store format allows customers to avoid long lines by ordering and paying ahead on the Starbucks app.
“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,” Starbucks CEO Kevin Johnson said in a statement. “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’ investment in a digitally enhanced customer experience was a key element of the company’s long-term strategy even before the coronavirus pandemic. Approximately 80 percent of all Starbucks orders were placed to-go before the COVID-19 crisis began, according to the company.
A steep decline in U.S. same-store sales over the last several months pushed company executives to move up the timeline. With social distancing protocols likely to remain in place for the foreseeable future, the changes are meant to limit store congestion and provide multiple ordering methods for safety-minded customers. The new service options will roll out alongside Starbucks' traditional cafe seating as states relax shelter-in-place orders.
Starbucks operates about 8,800 company-owned U.S. stores. Under the current upgrade plan, 68 percent of those stores will have a combination of convenience-driven service options, such as drive-thru access and curbside pickup, within 18 months, a company spokesperson said. At present, about 60 percent of Starbucks stores have drive-thru service.
The company declined to detail the cost of its investment in the store transformation plan.
Customers who utilize curbside pickup will order ahead on the Starbucks app and check-in at designated parking spaces outside the store. Aside from adding curbside pickup as an option at some locations, Starbucks plans to run a pilot program testing a store format that would exclusively offer the service.
While a majority of Starbucks stores already offer some form of drive-thru service, the company will add new functions at some locations, such as double-lane access or drive-thru plus curbside pickup. Lanes will be added at locations outside densely populated cities as well as in new markets.
The company also plans to renovate a select number of Starbucks stores, adding a separate counter to process mobile and delivery orders.
Starbucks estimated that it lost $915 million in sales during the second quarter due to store closures and limited operations during the pandemic. In a May 21 letter to Starbucks employees addressing the company’s recovery, Johnson said the company had regained about 60 to 65 percent of its U.S. same-store sales relative to the previous year.
About 90 percent of Starbucks stores have reopened with modified operations as of this month. Locations are expected to operate with reduced hours for the next several months.