Starbucks implements a shift: Elimination of seated coffee store layouts
Starbucks, the global coffee chain, is making a significant change in its strategy, focusing on bringing back the warmth and human connection that CEO Brian Niccol believes is essential for the brand.
Niccol, who joined Starbucks in 2019, has been at the helm of an overhaul of the company's management and operations. One of his key decisions is to add seats to Starbucks locations, starting with New York and Southern California. The company plans to add a total of 30,000 seats across its restaurants.
This shift is a departure from Starbucks' previous focus on convenience, as evidenced by the introduction of pickup-only stores. However, the company has decided to phase out this model, starting in 2026. These stores, numbering approximately 80 to 90, were characterized by their lack of seating areas, making them highly transactional and lacking the human connection Starbucks aims to maintain.
The decision to phase out pickup-only stores comes as Starbucks is examining its store portfolio as part of a broad-based turnaround. Sales at the chain turned negative starting in late 2023 and persisted through the end of the last quarter, marking the worst negative streak since 2009.
Niccol stated that the company is prioritizing warmth, connection, community, and is excited about creating the coffeehouse of the future. He wants Starbucks locations to be more than just places to grab a quick coffee; they should be destinations where people can gather, connect, and enjoy the Starbucks experience.
To achieve this, Starbucks is integrating digital/mobile convenience within standard stores. This includes enhancing mobile ordering and payment technology, ensuring a seamless experience for customers while preserving the community and social experience that Starbucks is known for.
Starbucks is also building a new standalone prototype that will open next year, featuring 32 seats, a drive-thru, and costing 30% less to build. Additionally, a smaller, 10-seat prototype is expected to open in New York City in the next few months.
The company has walked back many of its takeout-centric decisions, such as bringing back self-serve creamer stations and writing on cups again. Mobile order remains a vital part of Starbucks sales, representing 31% of transactions. However, the focus is now on balancing speed with customer experience.
By the end of September, the process of evaluating Starbucks' entire portfolio of locations is expected to be complete. It seems that Starbucks is committed to creating a new era for the brand, one that emphasizes warmth, connection, and community, while still delivering the convenience that customers have come to expect.
- In addition to revamping its management and operations, Starbucks is focusing on finance, aiming to create a lifestyle that promotes warmth, connection, and community within its restaurants.
- As part of its strategy, Starbucks is planning to expand fashion-and-beauty and home-and-garden sections within its stores, providing customers with more opportunities to enjoy the Starbucks experience.
- Travel enthusiasts may soon find Starbucks locations more appealing, as the company is considering adding travel-themed merchandise and experiences to its stores.
- For those with an interest in cars and sports, Starbucks is exploring partnerships to offer exclusive weather updates and sports news, enhancing the overall customer experience at its locations.
