Starbucks Closing 600 Locations In US, Canada To Refocus On 'Convenience-Led Formats'

Starbucks said Wednesday it still plans to close around 200 locations across Canada over the next two years. These closures come on top of around 400 locations in the U.S. closing its doors in the next 18 months.

The U.S. closures will be offset by around 300 new stores being opened, while no plans for future locations have been announced for Canada.

“Starbucks stores have always been known as the ’third place,’ a welcoming place outside of our home and work where we connect over a cup of coffee,” CEO Kevin Johnson said in a press release. “As we navigate through the COVID-19 crisis, we are accelerating our store transformation plans to address the realities of the current situation, while still providing a safe, familiar and convenient experience for our customers.”

Alongside the closures, Johnson said the company would be looking to “meet the already evolving customer needs” by expanding “convenience-led formats” at current and future locations. The way Starbucks said it would address this is a greater focus on pick-up orders and the Starbucks app.

“Prior to the COVID-19 crisis, approximately 80 percent of Starbucks U.S. transactions were on-the-go, driven in part by the ability to order and pay ahead using the Starbucks App,” the company said.

To accommodate these changes, some stores in several cities will undergo renovations in “Starbucks Pickup” locations. New York City, Seattle, Chicago and San Francisco are among the first markets these new pickup-and-go locations will open in.

Starbucks said plans were in place to begin this shift within the next five years, but the coronavirus pandemic made the company rethink its timetable.

“While we had originally planned to execute this strategy over a three- to five-year timeframe, rapidly evolving customer preferences hasten the need for this concept and we are now envisioning the accelerated development of Starbucks Pickup stores,” the company said.