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Starbucks accelerates convenience-centric real estate strategy

Executives plan to make order-ahead, drive-thru stores more ubiquitous

In a Starbucks COVID-19 update, Kevin Johnson, its president and chief executive, announced major acceleration of its Starbucks Pickup stores like the one operating at Penn Plaza in Manhattan. In addition to addressing consumers’ desire for convenience and the adoption of technology, mobile pickup stores will also offer consumers a way to safely enjoy the coffee chain’s beverage, bakery and meal options. More than half of consumers—56 percent of Americans—are still concerned about coronavirus according to May data from Datassential, a menu-analytics firm.

Starbucks stores with mobile-only ordering will also ease congestion for consumers looking for the on-premise experience as food stores benefit from reduced restrictions and reopen. QSRs see a real benefit from rapid pickup options. As of the end of April, limited-service fast food and coffee shops were down just 2 percent in comparable sales—mainly attributable to drive-thrus—according to Black Box, a data-analytics firm.

“By blending traditional Starbucks stores in dense markets with these new Starbucks Pickup stores optimized for the mobile order occasion, we not only improve the customer experience for those who want to sit in our store and enjoy their beverage but also create a great experience for those customers who want a convenient way to pick up their beverage on-the-go,” wrote Johnson. Starbucks also plans to increase the number of stores offering curbside pickup and delivery options.

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Under a former three- to five-year plan, Starbucks was moving away from mall trade channel stores that generated anemic traffic. Large format stores with drive-thrus will replace these low-traffic mall locations. Now, Starbucks will accelerate this shift in a timeline of 12 to 18 months.

Foodservice consultancy Technomic indicated that 82 percent of consumers agree that restaurants should have designated pickup locations and signage to maintain social distancing. QSRs, such as Starbucks, are developing a new strategy built around the ultimate convenience. Technomic and other experts suggest that the COViD-19 pandemic has only accelerated the need for food establishments to offer additional takeout options and adopt technology at a faster pace.

Photo credit: Starbucks

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