Coffee giant Starbucks could close up to 200 of its Canadian locations amid the fallout from COVID-19.
The move could mean 17 per cent of the companies 1,175 Canadian coffee shops shutting its doors in the next 18 month.
In a U.S. regulatory filing, Starbucks said “We will restructure our company-operated business in Canada over the next two years, with the potential of up to 200 additional stores being closed, with some of those stores being repositioned,” which suggests they could either move to a new area or change format.
The company has been experimenting with locations that are pick-up only coffee shops. The first Canadian location using the new format launched in January in Toronto.
In total, the company said it’s eyeing 400 total North American store closures as sales plummet due to pandemic-related closures.
Starbucks said it expects current-quarter operating income to plunge by up to $2.2 billion, with sales declines for the rest of the year. It estimates U.S. same-store sales to be down 10 to 20 per cent for the full year.
In a statement to 680 NEWS, Starbucks said they’ve reopened the vast majority of their stores around the world and modified operations to meet new public health guidelines.
“With each passing week, we are seeing clear evidence of business recovery, with sequential improvements in comparable store sales performance,” the statement read.
“The Starbucks brand is resilient, customer affinity is strong, and we believe the most difficult period is now behind us.”
Read the complete statement below.
The company previously indicated that it’s looking to expand the number of drive-thru locations it operates.
We’ve re-opened the vast majority of our stores around the world and modified our operations to meet new public health guidelines and evolving customer behaviors and expectations. With each passing week, we are seeing clear evidence of business recovery, with sequential improvements in comparable store sales performance. The Starbucks brand is resilient, customer affinity is strong, and we believe the most difficult period is now behind us.
On May 21, we outlined how we are intensifying efforts to address consumers’ increasing demand for convenience, including mobile ordering for pick-up, drive-thru and curbside delivery. We have a clear vision for our “Bridge to the Future,” and we are accelerating our plans to transform our store portfolio, elevate the customer experience for this new era, and drive long-term growth.
This strategy aligns closely with rapidly evolving customer preferences, including higher levels of mobile ordering, more contactless pick-up experiences and reduced in-store congestion, all of which naturally allow for greater physical distancing.
The store transformation in Canada over the next two years, means the potential of up to 200 stores being closed, with some of those stores being repositioned with innovative store formats, such as pick-up, drive-thru and curbside delivery.
With files from The Canadian Press