Starbucks to Add More Drive-Thrus

Coffee shop giant plans to move away from malls in favor of stand-alone locations.

May 26, 2020

SEATTLE—Preparing for a post-pandemic world, Starbucks has announced plans to relocate more of its mall locations to units with drive-thrus, reports

Management of the Seattle-based business believes an even greater percentage of future orders will be takeout, and in a letter sent to customers last week, CEO Kevin Johnson said the company is looking for additional drive-thru locations.

“Our digital leadership and ability to transform lower-performing locations and formats to successful new store formats (i.e., relocate Starbucks stores from low-traffic malls to new, thriving Starbucks locations that combine the third place with drive-thrus) are unique strengths we will lean into in the coming months,” Johnson wrote, referring to the chain’s “third place” strategy of giving consumers a place outside of work and home.

“The plans we had for this broader store transformation over a three- to five-year period will now occur over the next 12 to 18 months,” the letter said.

Starbucks also plans to add more mobile order pickup stores like the takeout location it opened in New York City’s Penn Plaza last year.

“By blending traditional Starbucks stores in dense markets with these new Starbucks Pickup stores optimized for the mobile order occasion, we not only improve the customer experience for those who want to sit in our store and enjoy their beverage but also create a great experience for those customers who want a convenient way to pick up their beverage on the go,” Johnson wrote.

Even before the pandemic, 80% of Starbucks’ orders were takeout. With even fewer customers expected to drink their coffee in the stores, the company wants to improve its service to those takeout customers.

Malls are seeing fewer customers, and most were closed altogether during the shutdown. Drive-thrus, on the other hand, are a popular option for customers, viewed as a safer alternative to dine-in restaurants during the pandemic.

The only Starbucks stores open throughout April were drive-thru locations, but the chain began reopening stores this month and predicts more than 90% will be open by early June. Currently, more of its locations will have curbside pickup, and the chain now offers delivery in 48 states.

In his letter, Johnson noted, “the look and feel of many stores will change” coming out of the pandemic. Starbucks expects worker hours to build as traffic increases with reopening, but Johnson said in his letter that the hours employees were accustomed to before the pandemic “won’t be available.”

Starbucks is extending an unpaid leave policy through the end of September for workers who want to retain benefits but access emergency employee benefits through federal or state sources. Johnson said the company will cover health-care premiums for workers during the crisis, and those on leave.

Since opening its locations, Starbucks has regained “60% to 65%” of last year’s same-store sales, the letter said, yet Johnson remained prudent. “Until a vaccine is developed and broadly available, consumers will be cautious as they return to work or go back to school,” he said. “And with over 36 million Americans suddenly out of work and concerned about their future, there are questions about the overall shape of the economic recovery in this COVID-19 economy.”

Still, the company is marketing its new summer menu to lure more customers back. The menu includes a new Iced Guava Passionfruit drink, a new Unicorn Cake Pop, Grilled Chicken and Hummus Protein Box and the return of its S’mores Frappuccino.

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