Starbucks to close line of stores amid major overhaul
Since taking charge in September 2024, new Starbucks CEO Brian Niccol hasn’t been a shrinking violet.
Amid slowing sales and new opposition in the shape of Luckin Coffee, a Chinese brand that ousted Starbucks from the top spot in China and has now opened its first stores in the US, the Seattle-born chain is undergoing some changes.
For one, baristas are now required to write affirmative messages on all takeaway cups, and that added complication to a high-speed process didn’t go down well with staff when it was announced. The idea is to open more opportunities to ‘connect’ with customers although, depending on your temperament, your mileage will certainly vary.
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An expanded return-to-office mandate for its office staff that has reportedly rubbed yet more employees up the wrong way, too.
Other changes include repositioning Starbucks as the ‘third space’ that it was pre-pandemic, with Niccol saying the shift to fewer seats and a more takeaway-focused service was a ‘misfire’.
In the latest move, Starbucks has announced it’s now closing its pick-up-only outlets.
“We found this format to be overly transactional and lacking the warmth and human connection that defines our brand,” said Niccol in a statement, per CNN.
They were first opened in New York in 2019, with customers placing all orders through the mobile app before picking them up at a pick-up counter. At most of those, there’s no seating available and minimal customer interaction, which no doubt suits many customers just fine.
Some locations had limited seating with in-person orders, but they were the outliers. Starbucks has opened around 90 of these pick-up stores since 2019, with most of those being in busy places like city downtown areas, hospitals and airports.
Niccol also reportedly said that the company will open a ‘small format version’ of its regular stores In New York City that will provide seating for just 10 people.
“We believe this new prototype will deliver an exceptional customer experience, improve unit economics, and unlock growth opportunities in more markets,” he explained, although it sounds like a pretty close approximation of the pick-up-only stores the company is shuttering.
There’s no official timeline for those closures at the time of writing. The BBC reported that some of those locations will be altered to include seating rather than being closed entirely.
Other upcoming plans include a hiring spree announced in April. In May, alongside reports of understaffing placing pressure on baristas at various outlets, over 2,000 Starbucks staff went on strike over dress code changes.
Big changes often come with resistance and friction, but it seems that’s the order of the day with the litany of changes introduced under Niccol.
Rachael Davis