COVID-19

Starbucks is closing stores and shifting operations amid COVID-19

Andy Uhler Jun 10, 2020
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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
Heard on:
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 do I need to know about tax season this year?

Glad you asked! We have a whole separate FAQ section on that. Some quick hits: The deadline has been extended from April 15 to May 17 for individuals. Also, millions of people received unemployment benefits in 2020 — up to $10,200 of which will now be tax-free for those with an adjusted gross income of less than $150,000. And, for those who filed before the American Rescue Plan passed, simply put, you do not need to file an amended return at the moment. Find answers to the rest of your questions here.

How long will it be until the economy is back to normal?

It feels like things are getting better, more and more people getting vaccinated, more businesses opening, but we’re not entirely out of the woods. To illustrate: two recent pieces of news from the Centers for Disease Control. Item 1: The CDC is extending its tenant eviction moratorium to June 30. Item 2: The cruise industry didn’t get what it wanted — restrictions on sailing from U.S. ports will stay in place until November. Very different issues with different stakes, but both point to the fact that the CDC thinks we still have a ways to go before the pandemic is over, according to Dr. Philip Landrigan, who used to work at the CDC and now teaches at Boston College.

How are those COVID relief payments affecting consumers?

Payments started going out within days of President Joe Biden signing the American Rescue Plan, and that’s been a big shot in the arm for consumers, said John Leer at Morning Consult, which polls Americans every day. “Consumer confidence is really on a tear. They are growing more confident at a faster rate than they have following the prior two stimulus packages.” Leer said this time around the checks are bigger and they’re getting out faster. Now, rising confidence is likely to spark more consumer spending. But Lisa Rowan at Forbes Advisor said it’s not clear how much or how fast.

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