Starbucks accelerates new pick-up hybrid stores, plans more changes for fall

Starbucks has been dynamic in its changes amid the ongoing coronavirus pandemic and is set to roll out a new blend of hybrid storefronts.

As more locations cater to curbside takeaway, drive-thru and mobile-only orders with coffee shop dining spaces sealed off, the company announced on it's earnings call that it will accelerate the rollout of new pick-up stores.

"In urban core markets where drive-thru and curbside aren't feasible, we will begin to reposition our store formats," CEO Kevin Johnson said Tuesday. "These stores are built in a smaller footprint and create a familiar and convenient walk-through experience that is very relevant to customers in urban markets."

The team explained that the new store concepts will "ideally be located within a three to five minute walk from a traditional Starbucks store" to give customers flexibility to enjoy beverage in our store or on the go.

"We plan to accelerate the development of over 50 of these stores over the next 12 to 18 months with a view to have several hundred in the U.S. over the next three to five years," the team added.

The director of the coffee company explained that data from their third quarter earnings which showed "customers are adapting their routines" ultimately prompted Starbucks' decision to start "accelerating innovative store formats."

The company plans to leverage its various store formats "to create a network of stores in a community," Johnson added. "Think of this as blending highly complementary store formats throughout a community that collectively better serves the expanding and shifting need states of customers in that community."

Additionally, Starbucks announced that it will introduce "a simple handheld device to further increase throughput and improve the customer experience."

There will also be a new curbside pick-up experience available in 700 to 1,000 locations by the end of this quarter to enable incremental customer visits.

"Our near-term focus is to recover sales safely and responsibly," Johnson said, adding that they have seen firsthand "the power of integrating physical and digital customer touchpoints to meet customers' growing need for convenience."

This fall, the brand will also enhance it's app-based loyalty program, Starbucks Rewards, with a new pay-as-you-go option for members in the U.S. and Canada.

Finally, Johnson reiterated that the businesses' "recovery strategy is working" and that Starbucks has "future-proofed" their model with strategic initiatives for long-term growth in the face of the pandemic.