Marketplace Logo Donate

Daily business news and economic stories from Marketplace

Starbucks is closing stores and shifting operations amid COVID-19

Heard on:
A Starbucks in Maryland encourages mobile orders.

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

get the podcast

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.

What's Next

Latest Episodes From Our Shows

7:55 AM PDT
2:34 AM PDT
1:33 PM PDT
Aug 16, 2022
Aug 16, 2022
Jul 7, 2022
Aug 9, 2022
Exit mobile version