Starbucks has announced it will gradually phase out its mobile order and pickup-only stores in the US, saying the format lacks the personal touch that defines the brand.
The world’s largest coffee chain currently operates around 90 such outlets with no customer seating, a concept embraced by some rivals. However, Starbucks says the setup feels too transactional and fails to offer the warmth and human connection customers expect.
“We found this format to be overly transactional and lacking the warmth and human connection that defines our brand,” said CEO Brian Niccol during an investor call on Tuesday.
The move comes as Starbucks continues to revamp its operations under the “Back to Starbucks” initiative. The company is shifting its focus back to traditional coffeehouses with seating, promising faster service and more welcoming spaces. Some existing pickup-only locations will be converted to include seating.
Despite the change, mobile ordering which now accounts for nearly a third of all transactions will remain a key feature across all Starbucks locations.
Niccol also revealed that at least 1,000 US stores will be redesigned by the end of next year, with thousands of seats restored and a refreshed in-store experience. The company will also scale back automation, hire more baristas, and introduce updates to its menu and employee dress code.
The strategy shift follows disappointing earnings, as same-store sales declined for a sixth consecutive quarter. Still, Starbucks shares rose more than 4.5% in extended trading on Tuesday in New York, reflecting investor confidence in the new direction.
The chain currently operates over 41,000 stores worldwide.
