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This is not the first time Starbucks has leaned into diverse, off-premises-focused store formats.

Starbucks will roll out delivery-only locations in the future

Rachel Ruggeri, CFO and executive vice president of Starbucks, discussed the future of Starbucks at the TD Cowen annual Future of the Consumer conference

Starbucks is constantly experimenting with new store formats and will likely be rolling out delivery-only stores sometime in the future, Rachel Ruggeri, Starbucks CFO and executive vice president said at the TD Cowen 7th annual Future of the Consumer conference on Tuesday.

“When we think about our opportunity in the future, it's how do we leverage our portfolio to unlock capacity, but also in a way that best meets the customer needs and demands?” Ruggeri said. “So that’s going to be different versions of drive-thru stores, delivery-only stores as well as different versions of pickup stores. There are lots of different store designs and types to be able to meet the increasing demand that we see.”

This is not the first time Starbucks has leaned into diverse, off-premises-focused store formats. In 2019, Starbucks opened the first express, pickup-only minimalist café in New York City and introduced this new format to high-traffic urban environments. Then, during the height of the pandemic in 2020, Starbucks announced that it would begin closing hundreds of stores to way for these new pickup-only and mobile-focused express stores.

Although Starbucks has not yet opened ghost kitchen cafes in the U.S., the company has already been experimenting with the format in China as far back as 2019, when Starbucks said it was partnering with Starbucks China’s delivery partner Alibaba and their Hema supermarkets to test out delivery-only cloud kitchens.

“When we talk about a delivery-only store, we see a path towards that in the future as delivery is becoming a more and more meaningful part of our business,” Ruggeri said. “We look at delivery-only as a way to take the complexity out of the existing stores, and it creates a better experience for both the partner and the customer.”

She also said that Starbucks is looking into drive-thru-only cafes with double drive-thru lanes that service both traditional drive-thru orders and mobile order pickup customers.

“It may not be right for a customer like me who likes to walk into the store, but it's ways to be able to use the store designed to elevate the experience for the customer and also at the same time taking into account what it means for the partner,” Ruggeri added.

Besides testing out new store formats, Ruggeri also touched upon the importance of Starbucks’ digital experience, which now includes the fledgling Starbucks Odyssey Web3 community. She said that while on out of every 10 U.S. adults is a Starbucks rewards member, there is still opportunity for growth in that sector, and to work on the digital third place.

Ruggeri was also asked about the rollout of the new Siren System, the proprietary in-store equipment system that is meant to improve employee efficiency through automation. The rollout is going slower than expected, and should reach less than 40% by 2025 instead of the expected 50% of all stores by that time, as the company figures out how to best retrofit Starbucks stores with the new equipment.  

Contact Joanna at [email protected]

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