COVID-19

Starbucks is closing stores and shifting operations amid COVID-19

Andy Uhler Jun 10, 2020
Heard on: Marketplace
HTML EMBED:
COPY
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:
COPY

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

Are states ready to roll out COVID-19 vaccines?

Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.

How is the service industry dealing with the return of coronavirus restrictions?

Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.

How are hospitals handling the nationwide surge in COVID-19 cases?

As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.

Read More

Collapse

As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.

Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.

Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.