Starbucks cuts entire line of locations amid sales slump
But now, Starbucks is scrapping its pick-up only cafes after admitting the concept fell flat. That means all 90 shuttering after a six year experiment.
The decision comes as the coffee giant reported its sixth straight quarter of declining sales.
'We found this format to be overly transactional and lacking the warmth and human connection that defines our brand,' Starbucks CEO Brian Niccol said on the companies second quarter earnings call.
Tuesday's call revealed that Starbucks's global sales had declined two percent in the three months ending June 29.
It means Americans bought hundreds of millions fewer cups of coffee than the same period in 2024. And it was an even greater drop than the 1.3 percent decline expected by analysts.
The coffee company has been in turnaround mode under Niccol for almost a year.
However, Niccol's efforts to simplify menus, cut waiting times and make cafe's friendlier have yet to show up in the figures.
The axing of pick-up only stores appears to be an attempt to cut unnecessary costs, especially as the company begins an expensive mass hiring spree.
The stores were launched with a flashy flagship model in New York in 2019.
The 'Starbucks Pick Up' grew into around 90 locations across the country, mostly in downtown areas full of busy office workers. airports and hospitals.
Some of these locations will be converted into traditional sit-down Starbucks cafes in the future but it is not yet clear which.
Niccol said Starbucks's app 'can deliver the same level of convenience through our community coffeehouses.'
Starbucks is also introducing a new 'small format version' of its stores with just 10 seats in New York City.
'We believe this new prototype will deliver an exceptional customer experience, improve unit economics and unlock growth opportunities in more markets,' Niccol said on Tuesday.
Niccol has previously claimed he wants to bring back the warmth and personal touch that once made Starbucks a beloved 'third place' between home and work.
New CEO Brian Niccol said the stores were 'overly transactional' and 'lacking warmth'
Part of that effort has been bringing in comfier chairs, making tables larger and adding power outlets.
In addition baristas have been told to bring back writing messages on customers cups to brighten their day.
Starting in August Starbucks is beginning a hiring spree to bring its staffing levels back in line with its pre-pandemic era.
Five years ago, Starbucks stores averaged 23 employees. Cost-cutting has since trimmed that number down to 18 to 19 — four to five fewer workers per location.
Restoring pre-Covid staffing levels would mean hiring between 68,000 and 85,000 people across all US stores.
Even focusing solely on the 11,000 company-owned locations, the increase would still be a massive 44,000 to 55,000 hires.
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