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Starbucks is Adopting This McDonald's Strategy in Order to Survive

The coffee chain giant is closing 400 locations in order to test out a new business model in the wake of COVID-19.

Your favorite coffee chain may be closing its storefront nearest to you over the next year and a half, but not because the company is doing poorly. It's a move to better tailor to consumers' needs—and it's been in the works for a while.

Largely in response to the pandemic, Starbucks made an announcement today that the company will close up to 400 locations over the next 18 months. In place of these traditional cafes, Starbucks will be opening pickup locations designed for takeaway orders.

According to Restaurant Business, the news was revealed in a letter to "all Starbucks stakeholders" where CEO Kevin Johnson states that he envisions every major metro area in the U.S. having a mix of both cafes and pickup-only stores. The incentive for the remodel is to give customers more options when choosing a to-go coffee drink or breakfast sandwich without overcrowding the store, which was an issue long before the pandemic even began.

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How many times have you walked by a Starbucks and decided to skip your morning coffee order because the line was too long inside? The crowding that inevitably occurs at this chain (and at various times throughout the day) has pivoted from being a disservice to the company's daily traffic to instead posing a potential health risk.

"Starbucks Pickup stores will provide more points of presence to better serve 'on-the-go' customers while reducing crowding in our cafes, thereby improving the 'sit-and-stay' experience for third-place occasions," Johnson said in the letter.

The need for these Pickup stores outweighs the novelty that comes with sitting in a traditional cafe, and recent sales data is indicative of it. Even with 95% of Starbucks locations open, more than 90% of sales have come from orders placed through the drive-thru or via the app online.

Interestingly, the new model was already in the works, however, Johnson had originally anticipated having it unfold over the course of three to five years. The pandemic merely expedited the plan.

Cheyenne Buckingham
Cheyenne Buckingham is the news editor of Read more