Starbucks, the world's largest coffee brand, will gradually phase out its pickup-only stores that operate without seating.

According to reports from the BBC in the UK and the Wall Street Journal (WSJ) in the US on July 30 (local time), Brian Niccol, CEO of Starbucks, announced this policy during the company's third-quarter earnings conference call held on June 22.

Starbucks, the world's largest coffee brand, will gradually phase out pickup-only stores that operate without seating.

CEO Nicole stated, "We concluded that pickup-only stores lack the warmth and human connection that define our brand."

He explained, "In the fourth quarter, we plan to unveil a 'next-generation coffeehouse' featuring seating and drive-thru capabilities."

CEO Niccol stated, "(Pickup-only stores) are excessively transaction-focused," and explained, "We concluded that they lack the warmth and human connection that define our brand." He added, "Even with our existing store formats that have seating, we can offer the same level of convenience as pickup-only stores through mobile ordering."

The first pickup-only store appeared in New York, USA, in 2019. In 2020, then-CEO Kevin Johnson announced plans to expand takeaway stores mainly in major metropolitan areas. Currently, there are about 90 pickup-only stores without seating operating in the United States.

However, as concerns were raised that pickup-only stores do not align with the Starbucks brand image, the company decided to phase out this store format. Some stores will be converted into traditional formats with seating.

Since taking office in September last year, CEO Niccol has been focusing on restoring the brand image of a "welcoming coffeehouse with excellent seating" rather than pursuing automation and workforce reductions, under the "Back to Starbucks" strategy. He explained, "In the fourth quarter, we plan to unveil a 'futuristic coffeehouse' equipped with seating and drive-thru features."

CEO Niccol is implementing various management strategies to improve Starbucks' performance. These include menu simplification, enhancing in-store experiences, and reducing the time to serve each beverage to under four minutes.

A Starbucks cup is placed on a counter in the borough of Manhattan, New York, USA. Photo by Reuters Yonhap News

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However, these management policies have not yet translated into results. In the third quarter, same-store sales at Starbucks locations in the US decreased by 2% compared to the same period last year, marking a decline for six consecutive quarters. Net profit for the third quarter also fell by 47% year-on-year to $558 million (approximately 776.2 billion KRW), falling short of Wall Street expectations.