Starbucks will close up to 400 company-owned stores in the Americas, according to a recent SEC filing obtained by CNN.
These store closures come as the company is putting a greater focus on to-go orders and mobile orders. The closings are "in conjunction with the opening, over time, of a greater number of new, repositioned stores in different locations and with innovative store formats.” Those new stores, as we previously reported, will be more focused on to-go orders and mobile orders, which were already planned pre-COVID-19, but have been sped up in order to meet new customer demands.
Prior to the coronavirus pandemic, about 80 percent of Starbucks transactions in the U.S. were on-the-go, so the chain is adapting to fit not only increased needs for safety, but also how customers seem to prefer to get their coffee now.
Coronavirus and the social distancing measures surrounding it has dealt a tough blow to many companies, including Starbucks, which pivoted its stores to a drive-thru-only format in March. Starbucks estimates that it lost between $3 and $3.2 billion in revenue this past fiscal quarter because of COVID-19 and it expects same-store sales to drop by up to 45 percent year-over-year for that quarter.
However, things are looking up for Starbucks as states begin to slowly lift social distancing measures. Many stores began to reopen this month, and 95 percent of U.S. locations are open again. Those that are still closed are largely in New York City. The brand is expecting its cash flow to be positive by the end of June.
“With each passing week, we are seeing clear evidence of business recovery, with sequential improvements in comparable store sales performance,” CEO Kevin Johnson and CFO Pat Grismer wrote in a letter to stakeholders in the filing: “The Starbucks brand is resilient, customer affinity is strong and we believe the most difficult period is now behind us.”
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