Starbucks to Close Pickup-Only Stores, Citing Lack of ‘Warmth’
Starbucks has announced plans to phase out its mobile order and pickup-only stores, saying the format fails to deliver the sense of connection that defines the brand.
The world’s largest coffee chain operates around 90 such outlets in the US, designed without seating to cater to customers collecting pre-ordered drinks. While the move will not affect Starbucks’ mobile ordering service, which makes up nearly a third of US transactions, CEO Brian Niccol said the company will focus on enhancing experiences in its traditional cafés.
“We found this format to be overly transactional and lacking the warmth and human connection that defines our brand,” Niccol told investors on Tuesday after the company reported its sixth consecutive quarterly decline in US same-store sales, down 2% in the three months to June.
Net income for the quarter dropped 47% to $558 million (£418m), falling short of Wall Street forecasts.
Starbucks will now prioritise welcoming coffeehouses with seating, aiming to serve drinks in under four minutes at both cafés and drive-throughs. Some pickup-only stores are expected to be converted to include seating, according to the company.
The first pickup-only store opened in New York in 2019 to simplify mobile and delivery orders. But Niccol, who became CEO last year, is leading a “Back to Starbucks” initiative to revitalise the chain’s identity and financial performance.
The plan includes revamping 1,000 US cafés by the end of next year, adding thousands of seats, hiring more baristas, and scaling back automation plans. The company is also updating its menus and employee dress code.
Starbucks, which operates over 41,000 stores worldwide, saw its shares rise more than 4.5% in extended trading following the announcement.
