Starbucks, a much-loved meeting place, is making changes. In June 2022, the company announced that not only are they going to close many of their stores, but they will also opening a number of new ones.
You may wonder why is Starbucks closing stores? It seems odd to do this if you are simply going to reopen them somewhere else. The answer may surprise you.
Starbucks, ringing in the changes
The advent of the café model as we know it was made famous by a number of brands, one of which is Starbucks. Now, they are moving away from what they helped create by expanding on the pick-up and to-go industry in a move that depicts just how much society and customer behavior has shifted due to the Covid pandemic.
Starbucks, along with many other industry giants, took quite a knock during the pandemic, suffering a virus-related revenue loss potentially exceeding $3 billion in its third quarter. It also cut its operating income by more than $2 billion as the pandemic continued, in what turned out to be a massive learning curve for the company.
The changes in consumer behavior brought about by the pandemic, and resulting restrictions caused the powers that be to sit back and rethink their business model. While the amount is down from the initial count of 600 new stores, the company plans to open up around 300 new stores in its current financial year, while ultimately shutting down almost 600 of its existing stores.
The closures will affect the stores predominantly located in dense metro areas such as campuses and malls, due to the fact that locations such as these have seen a rapid decline in consumer traffic due to changes in client behavior and preferences. This inclination isn’t due only to the pandemic and its aftermath; the leaning towards a more expedient pick-up and deliver service was becoming popular before Covid struck, a trend which has intensified since then.
The expected Starbucks closures over the next 18 months are among the changes that make this one of the most ground-breaking periods in the history of the company. The reality is that many consumers no longer want to sit down and enjoy a leisurely coffee; gone are the days of lingering over your frothy latte!
Nowadays, they prefer to walk in, grab their order and go, in many cases, with the least amount of interaction possible, and the reason why so many of the new stores are ‘to-go’ models.
These changes meant a little streamlining and fine-tuning were in order, led predominantly by a need for convenience, efficiency and accessibility, making the process quicker, easier and with far less hassle than ever before. This is a huge plus for the consumer, which is why the development of drive-thrus, curb side and mobile-only pickup services are part of the plan going forward.
Curb-side pickup has shown great potential at retailers and restaurants during the pandemic, making it an extremely viable consideration. It will work via the Starbucks app, where customers will make use of the order and pay feature before checking in at elected parking bays when arriving at the designated store.
While people still want to be part of an active social community, the way in which they do it has changed. Thus Starbucks wants to create something that caters to both worlds; after all, we all want to be able to socialize freely.
Another one of the motives behind the creation of the new stores is to lay a foundation that bridges the convenience of digital accessibility with an improved ‘pick-me-up’ experience.
There are three significant parts to the initiative, such as the distribution of the previously mentioned curb side collection, and the circulation of portable point-of-sale apparatus at the drive thru. The third is the newly launched update to the Starbucks loyalty program, ‘Stars for Everyone.’ In the past, patrons had to load the funds into their account, which was time-consuming and not the most expedient method.
The new rollout not only makes earning stars easier, but it allows customers to pay using a variety of methods, mobile wallets, cash, debit or credit cards, and at the same time earn rewards that can be put towards free items. In addition, should a customer save a card to their account, they can receive one star per dollar and link to PayPal.
Another exciting aspect of the new stores will be a move towards a more plant-based ethos; not only is this the way of the future, but it is the way in which many consumers are heading; a broader variety and ease of choice make for happy customers who return time and time again.
It’s an evolution of opening up the channels, making the transition between ordering, purchasing, and seating as smooth as possible while retaining the company’s core qualities of excellence and accessibility.
Do you want to know even more about Starbucks?
…0r maybe you’d like to work there? If so, check out my Starbucks Application and the most common Starbucks Interview Questions, as well as the Starbucks Barista Interview Questions. However, if you have a criminal record, it’s worth finding out Does Starbucks do Drug Tests, or Does Starbucks Hire Felons?
And if you’re still at school but would love to be involved in the hustle and bustle of a busy coffee shop, you may be wondering, How Old Do You Have To Be To Work at Starbucks?
Plus, for you aspiring baristas, I found these great books to brush up on your skills, such as The Home Barista: How to Bring Out the Best in Every Coffee Bean, and Top 100 Coffee Recipes: A Cookbook for Coffee Lovers, or my top choice, The Coffee Book: Barista tips & recipes from around the world, or lastly, The Ultimate Coffee Bar Cookbook for Coffee Lovers all available online in 2023.
Is Starbucks Closing Stores? – Final Thoughts
Innovation is key when it comes to capturing and maintaining customer interest, especially since the new normal means keeping up with change or losing out, making sure the consumer feels safe and experiences convenience in familiar and comfortable surroundings. In this way, Starbucks is setting the scene for socialization while still ensuring their customer receives top-notch service and a memorable experience.
They have taken the transition that consumers have made and adapted their brand around that. From densely populated metro areas to suburbs; from the early morning rush to a more leisurely mid-morning or afternoon beverage break; along with an increase in sales over weekends; the move from café to drive-through, as well as mobile and delivery options such as Uber eats, Starbucks have regrouped and come back with a winning formula.
In a nutshell, it’s a case of adapt or die, and I think Starbucks is adapting rather well.
Happy coffee time!
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