Starbucks Pushes To-Go Sales as Dine-In Operations Remain Closed
By Heather Haddon
Starbucks Corp. said it is speeding up plans to build stores
with drive-throughs and will close locations in unpopulated malls
as its dine-in service remains suspended due to the coronavirus
The Seattle-based coffee company said Thursday that U.S.
same-store sales are now down 35 to 40% from last year, after it
closed dine-in operations starting in March. Sales in its key China
market, where Starbucks had closed more than half of its stores
from January, remain 20% lower than the same period last year.
"We know that it will take time to fully recover and post
positive comparable store sales growth," chief executive Kevin
Johnson said in a letter to employees.
The letter provided the company's first business update since it
opened more than 85% of its owned U.S. stores to drive-through,
delivery and carryout earlier this month. Less than half of its
U.S. company stores were open last month. Starbucks, which said it
expects 90% of its stores to reopen by early June, offered no
details on when cafe dining service may resume.
Starbucks said it is instead accelerating its plans to build
more drive-through stores and to-go only locations, as it had begun
to do in New York City prior to the crisis. It will relocate stores
out of "low-traffic malls," the company said.
Plans to build more drive-through and to-go only locations will
occur in the next 12 to 18 months rather than three to five years
due to the pandemic, it said. Starbucks said it is also rolling out
ads encouraging customers to order ahead through its app, as have
many other restaurants trying to operate with less contact between
customers and employees during the pandemic.
Shares in Starbucks rose 1% to $78 in morning trading.
Starbucks said employees' working hours won't return to
pre-pandemic levels for now, adding that demand from key groups,
including office workers, is unlikely to revert to previous levels
"It is important that we are open and honest about the current
reality," said Mr. Johnson, adding that it is extending unpaid
leave that it first rolled out after the pandemic hit.
Write to Heather Haddon at firstname.lastname@example.org
(END) Dow Jones Newswires
May 21, 2020 11:21 ET (15:21 GMT)
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