Starbucks is closing up to 400 North American stores and replacing them with takeaway-focused locations
The brand will reorient some North American stores toward takeaway service. Most of these stores will be located in suburban markets, but the brand is also experimenting with more urban-based pickup locations. Emphasizing takeaway could cater to pandemic-driven trends that accelerated existing industry shifts.
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Since the coronavirus pandemic forced Starbucks to temporarily shutter stores and is expected to plunge revenue in the chain's fiscal Q3 2020 (ending June 30, 2020), the brand is accelerating a push toward digital, per remarks made by CEO Kevin Johnson reported on by

Starbucks is reimagining some store concepts several years ahead of schedule to meet shifting customer needs amid the pandemic.

The brand will reorient some North American stores toward takeaway service. Starbucks plans to close up to 400 US and Canadian stores — about 4% of total stores in the market — and instead reopen smaller-format locations with more emphasis on curbside pickup, walk-up counters, and drive-thru offerings, per TechCrunch. Most of these stores will be located in suburban markets, but the brand is also experimenting with more urban-based pickup locations.

Emphasizing takeaway could cater to pandemic-driven trends that accelerated existing industry shifts. Takeout was already comprising 80% of the brand's sales, pushing Starbucks to plan a shift toward smaller-format stores in the next three to five years. But a shift to takeout-only service amid the pandemic combined with consumer wariness to dine in or use the coffee shop to work, even as key markets begin to recover, likely accelerated changes. Limiting operational expenses could help Starbucks buffer its expected sales downturn, which is already improving — same-store sales were down 43% last month, relative to 63% in April — but could stay depressed if China is any indication.

Starbucks' plan won't be fully implemented for over a year, but it could set a blueprint for action other quick-service restaurants (QSRs) might also take. Since the pandemic is likely to last through at least 2021, Starbucks could choose to expand the plan if the changes are effective in meeting consumer needs and improve the brand's results.

And for other QSRs that have been experimenting with curbside and increased order-ahead during the pandemic, and had already been investing in digital, it could also present a plan to buffer pandemic-driven downturns by allowing brands to avoid some of the challenges and expenses associated with reopening for dine-in service that might not even be used by consumers.

However, the firm's robust digital infrastructure could give it a leg up — and give its peers pause. eMarketer estimated that 25.2 million customers had downloaded the Starbucks app by the end of 2019, and the brand reported 19.4 million loyalty program users last quarter. Because Starbucks' loyal user base is inclined to digital tools, including mobile order-ahead, it's likely particularly well suited to quickly convert to a grab-and-go-focused chain with limited pain points.

Other eateries don't have as robust of a digital user base, though, and might struggle more with implementing such changes for the same reason, which could make it more challenging for competitors to implement similar models. And this might preempt a wave of rapid digital innovation and advertising in the quick-service dining space.

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