Because of its diligence, Starbucks is closing hundreds of stores and opening new locations across North America.
If you’re curious about why Starbucks is closing stores and opening new opens, you’re not alone. I wondered about the same thing, so I decided to research the issue! Here’s everything I discovered!
Is Starbucks Closing Stores In 2023?
Starbucks announced in 2020 that it will be closing 600 stores across North America over the next year and a half as of 2023. However, the closings will be exceeded by opening new locations that are expected to perform better. The new locations reflect a shift in customer behavior and will be primarily drive-thrus and to-go stores and counters.
If you want to find out more about the store closings, where the new locations will be and more, keep reading! I have everything you need to know!
Is Starbucks Closing Locations In North America?
Starbucks announced in June 2020 that it would be closing 400 locations in the US and Canada over the next 18 months.
Further, this was followed by another announcement to close 100 more stores in the US and 100 in Canada, bringing the total closings to 600.
However, the closings will not reduce the total number of North American locations, as Starbucks will be opening more stores simultaneously.
That said, Starbucks is closing stores located in dense metro areas, which already have a high concentration of Starbucks stores.
Still, the exact locations that will be closed have not yet been announced, but they will also include high-traffic areas like malls and campuses.
With that, these locations have seen a decline in traffic due to the pandemic and changing customer preferences.
Even before the pandemic, the trend favored pick-up and delivery orders, and it has only intensified since then.
Why Is Starbucks Closing Locations?
Starbucks is closing hundreds of locations in North America, but it’s not due to downsizing or retrenchment.
Instead, Starbucks’ closings will be accompanied by the opening of new locations, mostly drive-thrus and to-go stores.
So, the stores that are being closed will be replaced by better-performing models at different locations.
Essentially, there are two reasons for this shift. First, Starbucks expects the new store formats to be more efficient and more profitable.
Second, the closings reflect changes in customer preferences for takeaway services, delivery, and curbside pick-up.
For example, as much as 80% of all sales at 15,000 Starbucks locations in the US are already from to-go orders.
Therefore, this trend will determine the locations of the new Starbucks stores.
However, the new store formats will preserve the fundamental Starbucks values of convenience and quality.
What’s The Plan For The New Starbucks Stores?
Starbucks store closings are not new, as about 100 stores are closed every year based on performance.
However, recent closings are on a much larger scale and are driven by changing sales patterns and trends in customer behavior.
Effectively, the store closings and openings show a shift away from the Starbucks cafe model to takeaway and delivery locations.
That said, as people adapt to the pandemic conditions and continue working from home, their shopping preferences also change.
Since the number of morning commuters has declined, Starbucks stores have seen a corresponding reduction in morning traffic.
However, this decline in morning numbers at Starbucks is compensated by mid-morning, afternoon, and weekend customers.
Also, there’s been a shift in sales from urban metro to suburb populations. On top of that, there’s been a shift from typical cafe frequenters that prefer seating to drive-thrus.
Thanks to mobile ordering and Starbucks delivery via Uber Eats, customer preferences are also shifting toward to-go and delivery options.
What Will The New Starbucks Locations Look Like?
The new Starbucks stores consider these changes in customer behavior, and the new locations will take them into account.
Consequently, the new Starbucks stores will include more double-lane drive-thrus, curbside pick-up, and walk-up windows in urban metro centers.
Also, the new locations will include new Starbucks pick-up stores where customers can only order and pay only through the Starbucks app.
Further, this is due to the increased online customer engagement with Starbucks during the pandemic, with millions of new mobile app users.
With that, ordering and payments exclusively through the mobile app makes the whole process much quicker and more streamlined.
Additionally, there’s already a Starbucks pick-up store operating at Penn Station in New York City since 2019.
Moreover, curbside pick-up is another new format that Starbucks is experimenting with, and it has proved to be very popular. So, you can expect to see more of these soon.
Starbucks has announced that it will be closing 600 stores across North America by 2022.
However, Starbucks will open an equal or larger number of new locations, so the total number of Starbucks stores will actually increase during this period.
That said, the new stores will be in locations and formats that reflect changing customer behavior and sales trends.
So, these trends show a shift away from urban metros to suburbs and cafes to takeout and delivery options.
However, the new locations will continue to emphasize the Starbucks values of quality and convenience.