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IPFS News Link • Business/ Commerce

Starbucks is about to look a lot different--and COVID-19 is only part of the reason why

• https://www.fastcompany.com, BY MARK WILSON

As COVID-19 began to crest in mid-March, Starbucks's stock plummeted alongside the rest of the market. After all, Starbucks has 15,000 stores in the U.S. and another 4,000 stores in China, and it closed cafes across both countries. How could it survive with the world under quarantine? But thanks to a successful front end of the quarter, in addition to app ordering, drive-throughs, and delivery, Starbucks's revenue only dropped 5% in the first three months of 2020. Starbucks survived, the stock has largely rebounded, and it's considered by some to be one of the safest investments to make today (although it expects results from the current quarter to be much worse).

It's more than the global need for a caffeine fix that's kept Starbucks afloat—though that certainly helped. The company has been investing in mobile ordering and easy pickups for years as a strategic counterpoint to being the cozy "third place" to hang out away from work and home. And now, anticipating that COVID-19 isn't going anywhere anytime soon, the company is doubling down on convenient coffee buying. Its entire digital order and pickup strategy that was slated for rollout between 2023 and 2025 has been fast-tracked. And as a result, over the course of the next 18 months, Starbucks will begin to look a lot different.

"One thing to know, even before COVID set into place, our business was roughly over 80% grab and go," explains Starbucks COO Roz Brewer. "But we were [already] doing some other work . . . looking at the future of retail and work and trying to decide where are the best places to place our stores."

In the third week of January, as COVID-19 was sweeping through China, the Starbucks crisis team began considering store closures and how to make operations safer.


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