David Dee Delgado/REUTERS
Starbucks’ grab-and-go stores are on the way out.
On Tuesday, the coffee store chain announced that it’s discontinuing its mobile order-only store model.
Around 80 to 90 pickup-only locations in the US, many of which are located in office buildings and offer no seating, will be phased out, said CEO Brian Niccol. Some will be converted into full-service stores with room to linger.
“These stores felt too transactional and didn’t deliver the warmth or human connection our customers expect,” Niccol told investors on the third-quarter earnings call.
A Starbucks spokeswoman declined to comment, including on how much the store renovations would cost.
The company has also been working with CloudKitchens, the ghost kitchen company run by Uber cofounder Travis Kalanick, to broaden Starbucks’ network in locations like San Francisco, Business Insider reported in 2023. These ghost kitchens, with private kitchens and no corporate storefronts, get Starbucks orders out on platforms like DoorDash to lessen the burden on brick-and-mortar stores.
Starbucks announced on Tuesday that it is developing a new “coffeehouse of the future” prototype that includes 32 seats and a drive-thru, which it plans to debut in the company’s next fiscal year. Starbucks is investing $500 million over the next year to bolster staffing and improve in-store wait times.
These changes come as Starbucks tries to boost sales — same-store sales dropped for a sixth quarter in a row. Niccol, who took over as CEO last year, has issued memos telling employees to spend more time in the office as part of his effort to “turn things around.”
On Tuesday’s call, Niccol said unpredictable coffee prices and ongoing pressure from tariffs may mean challenging financials until 2026. He said that “momentum is building” and that the company is “ahead of schedule.”
Throughout the day, Starbucks shares dipped on Q3 earnings that came in below analyst expectations, but rose around 3% in after-hours trading. Shares are flat this year.
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