SEATTLE— Starbucks Corp. announced plans to accelerate the transformation of its store portfolio in the United States through the integration of the physical and digital customer experience.
Over the next 18 months, Starbucks will increase convenience-led formats in company-operated locations with drive-thru and curbside pickup options, as well as new Pickup-only locations. The store experiences will be powered by the Starbucks App, the company 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,” said Kevin Johnson, chief executive officer at Starbucks. “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.”
The store portfolio transformation includes the expansion of new Starbucks Pickup stores in dense markets, including New York, Chicago, Seattle and San Francisco. Convenience-led enhancements, such as drive-thru and walk up windows, will be expanded in suburban areas.
Store layouts will be renovated to include a separate counter for mobile orders at high volume locations.
Before COVID-19, approximately 80% of US transactions were on-the-go, driven in part by the Starbucks App, which allows customers to order and pay ahead. The strategy of adjusting locations through store renovations, new formats, relocations and new builds aligns closely with evolving customer preferences as a result of the pandemic, including higher levels of mobile ordering, contactless pick up and reduced in-store congestion, Mr. Johnson said.
The company’s first pickup-only store began operating in Penn Plaza in New York City last year. A second location, near Grand Central Terminal, will open soon. In addition to new Pickup stores, Starbucks will increase the number of stores offering curbside pickup and will pilot a select number of locations to exclusively offer the format. Expanded drive-thru capabilities include opening new locations outside of densely populated cities and in new markets, as well as new experiences that could include double lane drive-thru or drive-thru plus curbside pickup.
In conjunction with the opening of new stores with updated formats, Starbucks will close up 400 stores in North America during the next 18 months, including 200 in Canada.