COVID-19

Starbucks is closing stores and shifting operations amid COVID-19

Andy Uhler Jun 10, 2020
Heard on: Marketplace
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A Starbucks in Maryland with curbside pickup and ordering. Starbucks announced it will add more options like this to accommodate social distancing. Jim Watson/AFP via Getty Images
COVID-19

Starbucks is closing stores and shifting operations amid COVID-19

Andy Uhler Jun 10, 2020
A Starbucks in Maryland with curbside pickup and ordering. Starbucks announced it will add more options like this to accommodate social distancing. Jim Watson/AFP via Getty Images
HTML EMBED:
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Starbucks has been pushing its mobile order and pick up option for a while, but more customers (like me, this morning) are using that option because of COVID-19.

I was in and out with my cold brew and iced lemon loaf cake in under a minute.

The whole experience felt like a far cry from the not-your-work, not-your-home destination that Starbucks used to be after — what some called “the third place.”

“In the short term, I think there’s probably a reimagining of what the third place looks like,” said Trevor Boomstra, a restaurant industry consultant with AlixPartners. 

Starbucks said Wednesday it will close up to 400 stores over the next 18 months and renovate and relocate others. Starbucks said it will be adding more on-the-go options like drive-thrus, curbside pickup and walk-up windows at hundreds of stores to accommodate customers in the age of social distancing.

There’s a sense of urgency because Starbucks said it’s lost $3.2 billion in revenue since the onset of the pandemic.

“Starbucks wants to get people back into the daily routine of having Starbucks,” said Alex Susskind, associate dean for academic affairs in the School of Hotel Administration at Cornell University. “Emphasizing the to-go element will make it easier for them to reach everybody consistently.”

Giant companies like Starbucks can afford to invest in rethinking and reshaping business models. But Spencer Turer, vice president at Coffee Enterprises, said many others don’t have that luxury. 

“A lot of independent specialty cafes may not have the facilities to be able to do that kind of service to maintain the financial integrity of their business,” he said.

Other retailers will be looking to Starbucks to see what works, Turer said, as all restaurants make post-COVID-19 adjustments.

COVID-19 Economy FAQs

What’s the latest on the extra COVID-19 unemployment benefits?

As of now, those $600-a-week payments will stop at the end of July. For many, unemployment payments have been a lifeline, but one that is about to end, if nothing changes. The debate over whether or not to extend these benefits continues among lawmakers.

With a spike in the number of COVID-19 cases, are restaurants and bars shutting back down?

The latest jobs report shows that 4.8 million Americans went back to work in June. More than 30% of those job gains were from bars and restaurants. But those industries are in trouble again. For example, because of the steep rise in COVID-19 cases in Texas, Gov. Greg Abbott, a Republican, increased restrictions on restaurant capacities and closed bars. It’s created a logistical nightmare.

Which businesses got Paycheck Protection Program loans?

The numbers are in — well, at least in part. The federal government has released the names of companies that received loans of $150,000 or more through the Paycheck Protection Program.

Some of the companies people are surprised got loans include Kanye West’s fashion line, Yeezy, TGI Fridays and P.F. Chang’s. The companies you might not recognize, particularly some smaller businesses, were able to hire back staff or partially reopen thanks to the loans.

You can find answers to more questions on unemployment benefits and COVID-19 here.

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