Starbucks is scrapping stores which are mobile-order and pick-up only because they are “overly transactional” and lack “warmth,” its CEO has announced.
The changes, which could affect 80 or 90 locations around the U.S. are part of a wider reshaping of operations in America, according to The Wall Street Journal.
Chief Executive Brian Niccol told investors on a Tuesday earnings call that some of those locations, which are usually found inside office buildings and designed for a speedy customer turnaround, may be converted into seated stores.
“We found this format to be overly transactional and lacking the warmth and human connection that defines our brand,” Niccol said, per the Journal.
The Independent has reached out to Starbucks to clarify what will happen to the locations that will not be converted into seated stores.
Niccol became Starbucks CEO in September last year, after previously heading up fast-food chain Chipotle, and has since pushed for more customer-friendly environments and better quality service – via increased worker training.
On Tuesday’s call Chief Financial Officer Cathy Smith told investors that the company will invest over $500 million to increase staffing in its U.S. company-operated stores over the next 12-month period.
Niccol added that Starbucks – the largest coffee chain in the U.S. – has begun work on the prototype for a “coffeehouse of the future,” which will have 32 seats and a drive-through.
Such locations will begin opening in the next fiscal year, the Journal reported.
It comes after Starbucks faced a downtick in sales from certain stores that has persisted for the last six quarters. Though the company’s net revenue rose 3.8 percent, beating analyst estimates, its overall same-store sales fell 2 percent for the quarter ended June 29.
Analysts on average had estimated a 1.19 percent dip, according to data compiled by LSEG. In its largest North America market, the drop in quarterly same-store sales was flat at 2 percent.
However, Niccol remained optimistic that the company’s comeback is ahead of schedule,
“While our financial results don’t yet reflect all the progress we’ve made, the signs are clear — we’re gaining momentum,” Niccol said Tuesday.
