Starbucks CEO eyes 'walk-thru' stores in big cities

(Starbucks CEO Kevin Johnson saying:) “Certainly as vaccines come and we start turning the dial up, I have no doubt in my mind the customer response coming to Starbucks is immediate, because we have seen it, as we, as we open up limited seating.”

Starbucks Chief Executive Officer Kevin Johnson says customers will flock back to stores once the health crisis eases.

And when they do, the Starbucks experience could be a bit different. The company is building walk-thru locations - a metro twist on the suburban drive thru. At these new to-go locations, orders will primarily be placed digitally and paid for ahead of time.

Johnson explained the concept in an interview with Reuters ahead of the company’s biennial investor day.

“In, sort of, suburban areas, the compliment of having a cafe where customers can go sit down as well as a drive-thru has really opened up the kinds of experiences that customers are seeking… What we're trying to do is build the equivalent of a drive-thru in a dense metropolitan area, which I think of it as a walk-thru. And so Starbucks Pickup is a walk-thru store. We call it Starbucks Now in China. And in these dense metropolitan areas, what we envision is that, for every Starbucks Pickup store we have, that within a three to five minute walk will be a Starbucks with a traditional cafe that you can go sit in and enjoy your beverage and meet with a colleague or a friend or family member."

In mainland China, the chain’s fastest growing market, the Starbucks Now stores will make up 10% of the 600 stores it plans to open there in the next year.

Starbucks is among several big restaurant chains expected to become even larger after the pandemic as they capitalize on drive-thru, pickup, delivery, and their hefty corporate financial cushions.

Altogether, Starbucks expects to grow nearly 70% to 55,000 locations globally over the next decade.

For future growth, Johnson said he is leaning on artificial intelligence – a suite of products Starbucks calls Deep Brew – to give store managers an edge in how they run their locations.

The goal is not to displace employees, but to have them focus on customer service instead.

The technology can create staff schedules and automate inventory management. Starbucks is also using AI to assess local covid-19 cases, customer preferences and employee sentiment in order to recommend, on a store-by-store basis, whether and how to slowly reopen locations.