Starbucks had done relatively well during the pandemic. The Seattle based corporation kept cash flowing after earning the essential business designation thanks to the fast-food and coffee they could offer those on the front lines of the crisis. Starbucks also avoided the controversies that plagued other essential businesses like Whole Foods and Amazon by focusing on the health and financial security of their employees. After those successes, the news that Starbucks will be closing 400 stores comes as somewhat of a shock.
400 Stores to Close
The United States is entering a transitional phase as it begins to move out of the pandemic lockdown protocol; Starbucks is about to do the same. In an attempt to soften the $3 billion losses the corporation suffered due to COVID-19, Starbucks headquarters has decided that they will be shutting down 400 traditional cafe stores over the course of the next 18 months.
Closing that many stores may sound like a drastic measure, but the reality of the situation is those moves were already in the woodwork. Starbucks had been preparing to start opening, what they call, “convenience-led formats” since late 2019. Those formats would include an increase in drive-thru location, the introduction of curbside pickups and the introduction of “mobile-order pickup only” locations.
The execution of this shift for the company was simply accelerated by the pandemic as it forced the corporation to put into practice some new store models earlier than originally planned. The only stores that remained open during the quarantine were drive-thru locations. As restrictions eased up, some stores re-opened under the mobile-order pick up only format while other cafe-only locations remained closed. As a part of the plan to transition to more “convenience-led formats,” Starbucks plans to open 300 new stores during this fiscal year. The original goal for this year was to open 600 new stores, but the financial hit the company took due to the virus cut that goal in half.
The Post-Pandemic Starbucks
Should things continue as they are currently planned, Starbucks will have 100 fewer stores this next year as compared to this year. However, the stores that will be open next year will operate very differently than the stores do now. After the success of the grab-and-go and drive-thru-only store formats during the pandemic, Starbucks will be much more confident in their plan to switch their stores to “convenience-led formats.”
So as the country fully re-opens, do not expect the same Starbucks experience of chatty baristas and a hipster-cafe vibe. It looks like the company will be focusing its efforts on satisfying our need for instant gratification in the standardized consistency only a corporation can offer.