Starbucks Will Close 400 U.S. Stores, Focus on Mobile Order and Pickup-Only Locations

The coffee chain is pivoting a significant portion of its business to walk-up windows and curbside service.

Starbucks has long pushed its value as a "third place"—a spot other than home and the office where people can congregate. But due to the COVID-19 pandemic, many Americans aren't even leaving their "first place." And now, as the chain continues to reopen across the country, Starbucks is making long-term adjustments to reflect this "new normal."

The coffee giant has announced "plans to accelerate the transformation of its store portfolio in the U.S. through the integration of the physical and digital customer experience." In other words, the brand will be placing further emphasis on to-go, pickup, and delivery orders—as well as further encouraging use of its app for things like ordering and payment—to streamline the Starbucks experience. As part of this initiative, Starbucks will be closing about 400 company-owned locations, though USA Today reports that the plan is to open an additional 300 new stores by the end of the year. The brand has about 15,000 U.S. locations, around 60 percent of which are company-operated.

starbucks pickup only location

"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 CEO Kevin Johnson explained in the announcement.

Specifically, the company wrote, "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 Starbucks Pickup locations." These "Pickup" stores are a relatively new format where customers utilize Mobile Order & Pay in the Starbucks app so they can grab their already prepared order and go. The brand explains that these kinds of locations will be expanded "in dense markets including New York City, Chicago, Seattle and San Francisco."

Other changes include an expansion of the number of suburban locations offering curbside pickup in the coming months, an expansion and enhancement of drive-thru and walk-up windows, and renovations in some stores to add a separate counter specifically for mobile orders (a move that makes things easier for delivery drivers, as well).

Interestingly, though the coronavirus outbreak clearly played a role in these decisions, Starbucks also points out, "Prior to the COVID-19 crisis, approximately 80 percent of Starbucks U.S. transactions were on-the-go, driven in part by the ability to order and pay ahead using the Starbucks App." Additionally, the first Starbucks Pickup location launched in New York City's Penn Station in November—before COVID-19 had even been identified. So some of these changes were already in the works.

Still, you can already sense a tinge of sadness as Starbucks starts to shed some of its "third place" identity. "While the way in which our customers experience Starbucks will evolve, the true Starbucks Experience is the connection made possible by partners who proudly wear the green apron," Starbucks COO Roz Brewer stated. "No matter their journey, after leaving our stores, we hope that feeling of comfort and connection stays with them."

Maybe that "third place" was inside us all along.

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