KOTA KINABALU: The first Starbucks drive-thru in the state capital is slated to open this month. We know our customers are dynamic and, over time, will be looking for more convenience, so we anticipate more growth over time.The new Starbucks drive-thru in Kota Kinabalu is slated to open this month. “Customer behavior will be what drives delivery. “We have seen some encouraging growth in our delivery business and believe it will continue to grow over time,” Grismer said. That’s not to say delivery won’t be part of Starbucks’ “ Bridge to the Future” plan, however. Grismer said customers haven’t broadly migrated to a “delivered beverage occasion” domestically like they have in China. Though delivery played a major role in keeping some chains afloat during the lockdown (and could easily explain why pizza players like Domino’s and Papa John’s actually thrived), it isn’t a material part of the Starbucks business. We don’t want to turn away traffic,” he said.ĭelivery will also be a piece of the puzzle moving forward for Starbucks, as it has been since last year when it partnered with Uber Eats. “It will depend on how customer habits evolve. The Pickup formats are currently set up to accept in-store and digital orders, though Grismer added the longer-term vision is digital only, like China’s Starbucks Now locations. Though the company wouldn’t disclose specific information about how its first two Pickup locations have performed, a spokesperson said customer engagement has been high and partner feedback on the design has been positive. And since it’s a smaller asset overall without a seating area, that enhances the fixed cost profile of the store, which further contributes to an improved margin profile.” “Also, that more nimble asset allows us to gain a presence in areas we couldn’t before. “As we introduce a more efficient format with more productivity, we reduce the bulking that can at times occur in urban locations and unlock sales through that improved efficiency,” Grismer said. He also expects near-term (fiscal Year 2021) pressure on sales, but ultimately–sooner than later–enhanced profitability from these new stores, particularly the Pickup locations in densely populated, urban markets. “We feel very good about the extraordinary data analytics our team has developed to allow us to rapidly learn and adjust as we go.” “We fully expect to learn as we go and further refine our plans in relation to specific locations, set up, interplay of these different formats based on how customers continue to evolve their behavior,” Grismer said. The long-term growth model calls for 3%-to-4% net new store growth by Fiscal Year 2022. What we know now is that the company is permanently closing 400 low-performing stores in North America in an attempt to answer that very question and in an effort to ramp up those more efficient formats. Again, Starbucks is not alone in having to figure out what that means from a real estate perspective. “We’re also seeing some pickup in suburban drive-thrus catering to people working from home who want to take a break.”Įssentially, less commuting means consumers will access the brand differently throughout the day depending on their trade area. A lot of professionals who work in cities also live in cities and we may benefit from that trade area transformation with a location closer to their home than their office in a commercial district,” Grismer said. “We’re right-sizing our assets to meet the type of demand we expect in metro markets. There’s also a shift in morning commuter habits to contend with as working from home becomes more ubiquitous. According to a new study from Toast, for example, only 19% of consumers say they would be “very comfortable” returning to a restaurant immediately. Additional research has supported this, showing that many consumers just aren’t ready to return to dine-in. Others, like Chipotle and Subway, have also honed in on the drive-thru channel specifically, perhaps indicating that the data analytics these deep-pocketed chains are gleaning point to a sharp pivot in consumer behavior. Notably, Starbucks isn’t the only chain that has disclosed plans to focus more on off-premise business post-pandemic.
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