Morning commutes to work have changed drastically due to Covid-19. No more stopping for coffee on the way to work if you’re working from home. So Starbucks is re-thinking its store model since drive-through and take-out has replaced sitting inside. Even with restaurant restrictions being lifted in most states, many consumers are finding that they like contactless order and pay, along with the convenience of fast pick-up. Quick service and fast casual restaurants that offer digital ordering, delivery, and drive-through will be on the fastest road to recovery after the pandemic.
The following Wall Street Journal article reports more on this topic which is excerpted below:
Starbucks Corp. said it would close some traditional cafes and open more to-go locations as the chain known for spreading coffee shops across the globe bets more on convenience and speed.
Shares fell nearly 4% in morning trading as Starbucks also detailed the financial impact from Covid and updated its quarterly and annual outlook.
Starbucks said Wednesday that it plans to close, renovate or move 400 traditional cafes in the U.S. and Canada in the next 18 months. For every store that is closed, at least one alternative location will open, executives said. The company said it aims to open 40 to 50 pickup-only stores in the next year-and-a-half. Starbucks owns about 10,000 stores in its Americas division, which includes the U.S. and Canada.
Starbucks supercharged the establishment of coffee shops across the country that aimed to be a “third place,” where people could commune outside home and work. But in recent years many consumers migrated toward takeaway orders, and the company was planning to change to some smaller store footprints over the next three to five years.
Overview provided by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group.
