Starbucks sees gradual reopening amid flattening curve

Ed Ludlow

Starbucks Corp. is planning to “gradually expand” operations at some stores in the U.S., citing progress in the fight to contain the coronavirus.

The company is taking a store-by-store approach to resuming business activities, which will remain limited to services like drive-thru, delivery and takeout via mobile orders and contactless pickup.

“As we experienced in China, this will be a journey,” Chief Executive Officer Kevin Johnson wrote in a memo to staff on Thursday. “We are thoughtfully preparing for this next phase as we adapt in the U.S.”

Customers wait for their order in their car at a Starbucks in Northbrook, Ill., Monday, March 16, 2020.

The company did not set a specific target date or timeline for the increased operations, instead adopting a “monitor and adapt” approach. In his letter, Johnson said the process will be gradual and be based on communities’ individual circumstances and guidance from government and health officials. Local sentiment and stores’ readiness to get back to work will also be considered.

Restaurants across the globe have shut their doors or severely scaled back services as the outbreak of the coronavirus known as Covid-19 has prompted people to limit social contact to contain the spread.

New Formats

In recent weeks, Starbucks has been testing formats such as contactless service, entryway pickup and curbside and at-home delivery in 300 of its U.S. stores. The company closed many of its North American stores on March 20, and limited operations at the rest.

Starbucks shares were little changed on Thursday. The stock fell 17% this year through Wednesday amid outbreaks in China and the U.S. – the company’s two key markets. Earlier this month, the company withdrew its financial guidance for the year and said negative impact may run until the end of its fiscal year in September.

The Seattle-based chain is also extending its “catastrophe pay” and other benefits for U.S. store workers through to the end of May.